Hari Krishnan, chief executive officer of Singapore-based startup PropertyGuru.
Nicky Loh | Bloomberg | beautiful pictures
Chief Executive Officer Hari V. Krishnan told CNBC the Southeast Asian online real estate company plans to use proceeds from its mass market launch next year for sales and purchases. merger.
Startups – operating in Singapore, Malaysia, Thailand, Vietnam and Indonesia – announced plans in July listed on the stock exchange through the merger of SPAC with Bridgetown 2 Holdings, a blank check company backed by billionaires Richard Li and Peter Thiel.
SPACs – or special purpose acquisitions – raise capital from the public market and use that cash to merge with a private company, with the goal of taking the company public within a short period of time. two year period.
The combined company from the merger of Bridgetown 2 and PropertyGuru is set to have a market value of approximately $1.78 billion, by company. The deal includes $100 million in private placement from investment management firms such as Baillie Gifford and Naya Capital of the UK, Australia’s REA Group, New York-based Akaris Global Partners as well as one of the Malaysia’s largest asset manager.
“That money will be on the balance sheet at the end of this business partnership,” Krishnan told CNBC in an interview last week. “And I would say it’s largely focused on data, software, home services, and fintech.”
In August, PropertyGuru acquired REA Group’s The property portal businesses Malaysia and Thailand.
Krishnan has ruled out any immediate plans to expand into other markets.
The agreement with Bridgetown 2 is pending regulatory approval by the US Securities and Exchange Commission. Krishnan predicts PropertyGuru could trade on the New York Stock Exchange near the end of Q1-March once the deal closes.
Bridgetown 2 Holdings the stock is down more than 23% since its market debut in January.
Why adopt a SPAC?
PropertyGuru looked at all options and all stock exchanges before signing the deal with Bridgetown 2, including considering trying a traditional IPO again, Krishnan said.
In 2019, the company is headquartered in Singapore plans scrapped for initial public offering on the Australian Stock Exchange because “market conditions are not ideal.” According to Krishnan, with Bridgetown 2, it was about finding the right partner.
We feel we are an attractive investment and obviously, time will tell whether investors agree or not.
Hari Krishnan
Managing Director, PropertyGuru
“We’re not sure we’re going to the US, we’re not tied to SPAC as a model, it’s become more about where we maximize opportunity, we maximize potential.” where to share my story with worthy investors.?” he said.
SPAC has regularly attract attention in Asia.
While private companies see them as a non-traditional way to access capital markets, a growing number of funders in Asia are also advocating for those empty checking entities.
Grab, one of the most prominent startups in Southeast Asia, start trading as a publicly listed company on Nasdaq on December 2, following a merger with the blank check company, Shares of Altimeter Growth Corp. fell on the first day of post-merger trading and has fallen 45% since.
Bypassing investor scrutiny
PropertyGuru’s “tried and tested” business model, 14-year history and economic fundamentals will be able to According to Krishnan, it is subject to investor scrutiny when it trades on the public market.
“I think that separates us from many other companies that have listed shares through the SPAC route or those from our region,” he said, adding that the business has relatively conservative market valuation compared to listed companies in the same industry.
“We feel we’re an attractive investment and obviously, time will tell if investors agree,” Krishnan said.
PropertyGuru’s current backers include global investment firms TPG Capital and KKR.
In a regulatory filing, the company reported a net loss of S$14.4 million (about $10.56 million) last year and a net loss of S$38.5 million in 2019.
For the six months ended June, PropertyGuru reported a net loss of S$150.6 million and largely a fair value loss on convertible preferred stock options. Because those preferred shares have been converted into common shares, the company said, such fair value losses are “not expected in future periods.”
Skyline of apartments in Grange Road area, Singapore on May 8, 2021.
Wei Liet Tay | Bloomberg | beautiful pictures
It also reports a Revenue increased by nearly 18% to S$42.9 million for the same period.
The coronavirus pandemic has been a headwind for the company, and 2020 is a challenging year, Krishnan said. That is despite the sky-high real estate prices in Singapore, one of PropertyGuru’s major marketplaces.
But the company is betting on some of the key, long-term macroeconomic trends in Southeast Asia – such as urbanization, digitalisation, and the emergence of a middle class. “Those are trends that won’t change. They can be paused, but not stopped,” Krishnan said.
PropertyGuru has been expanding beyond the real estate market, and into fintech services and data software, with a total addressable market of around $8 billion, he added.
