KKR-backed PropertyGuru Files For ASX IPO, Aims To Raise Up To $256m

Southeast Asian property platform PropertyGuru, whose backers include PE giants TPG Capital and KKR, has officially filed for an IPO on the Australian Securities Exchange (ASX).

According to its prospectus, PropertyGuru is seeking to sell 84.5-93.3 million shares at an indicative price range of A$3.70-4.50 each. The price represents 9 to 10.9 times the company’s forecast revenue for the calendar year 2020.

Assuming a final price at the midpoint of the indicative range, the IPO will raise about A$362.6 million ($245 million), the startup said in a statement on Monday. At the high end of the price range, it will raise about A$380.2 million ($256.54 million).

The offering values PropertyGuru at A$1 billion to A$1.22 billion on an enterprise value basis and gives it an indicative market capitalisation on the ASX of A$1.16 billion to A$1.36 billion ($782 million to $918 million).

Based on the mid-point of the indicative price range, TPG and KKR will hold a 26 per cent and 23.30 per cent stake in PropertyGuru on issue upon completion of the IPO.

PropertyGuru founders Steve Melhuish and Jani Rautiainen together own around 11.58 per cent of the company and plan to pare their stake down to 7.21 per cent in the IPO. At the top end of the indicative price range, they stand to reap a combined windfall of A$37.3 million ($25.2 million).

Existing PropertyGuru shareholders and their stakes before and after IPO:

Source: PropertyGuru prospectus

PropertyGuru says it intends to use part of the proceeds from the offering to pursue its growth strategy, which includes the potential expansion into a number of direct adjacencies, including providing property seekers in its core markets with convenient access to mortgage financing through an online mortgage marketplace and developing data offerings for its customers.

PropertyGuru operates digital property classifieds marketplaces in five countries across Southeast Asia – Singapore, Vietnam, Malaysia, Thailand, and Indonesia — and claims to have over 23 million property seekers on its platforms every month.

The company, which was one of the earliest property platforms launched in Southeast Asia in 2007, claims over 60 per cent consumer market share across its core markets. Among its biggest competitors in the region is Sequoia-backed 99.co, which last received a capital injection of $15.2 million in its Series B funding round led by MindWorks Venture and Allianz X this year.

PropertyGuru, however, has raised significant capital over the years as part of its effort to dominate the proptech space in the region.

Last year, KKR had invested S$200 million ($144.25 million) in the company via a Series D financing round. The startup had closed a $125-million round in 2015 from Australia-based Square Peg Capital, private equity firm TPG and Indonesian conglomerate Emtek Group.

Fundraising apart, 2018 was a landmark year for the company. It was the first year when PropertyGuru became both EBITDA and free cash flow positive, having seen its pro forma revenue grown at a 26% compound annual growth rate over the last three years. The company also announced last year that it was taking full control of Vietnam’s Batdongsan.com.vn after making an undisclosed minority investment in 2016.

Strong unit economics may prove to be essential for PropertyGuru ahead of its public offering given the recent struggles faced by loss-making tech companies such as Uber and WeWork in attracting interests of capital market investors.

“Through immersive content and proprietary technology, we aim to provide our property seekers, agent and developer customers with the right insights exactly when they need them. Digital innovation is in our DNA and we plan to continue investments in technology with the objective of creating solutions that benefit all our audiences,” said PropertyGuru CEO Hari V Krishnan.