REA Group and 99.co, the Singapore-headquartered digital property marketplace, have announced a joint venture to create the largest customer and listings footprint in Singapore and Indonesia.
The venture, combining the existing businesses of 99.co, Indonesian search portal Rumah123.com and REA's iProperty.com.sg, will target the growth in online property markets in Singapore and Indonesia as well as providing digital platforms for property professionals.
REA will now lead the stakes as its biggest investor with a 27 per cent shareholding and will also contribute US$8 million in working capital to the joint venture.
Existing 99.co backers, including the founding partners, Sequoia, Facebook co-founder Eduardo Saverin, Allianz X, MindWorks Ventures, East Ventures and 500 Start-ups will have stakes amounting to 73 per cent.
The move by REA signals the longer ambitions to capture market share in the region where it is positioned as a fierce competitor.
REA Group chief executive Owen Wilson said the Singapore marketplace was “ripe for disruption”.
“Our customers in this market want a true industry partner who can deliver world leading products and experiences.”
“Joining forces with 99.co creates the market leading presence in terms of customers and listings.
“Combined with our expertise and experience in other countries where we are the clear market leader, this presents a fantastic opportunity to rapidly increase our market share in these expanding growth markets.”
The joint venture company seeks to operate in Singapore and Indonesia, two markets where PropertyGuru claims to have a majority market share.
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.
Its backers include PE giants TPG Capital and KKR, filing for an IPO on the ASX.
REA Group will look to leverage the entrepreneurial expertise of 99.co, co-founded by chief executive Darius Cheung in 2014.
Under Cheung’s leadership, 99.co has grown its total user base by 32 times in the past two years, said the press release.
Prior to establishing 99.co, Cheung co-founded Singaporean mobile security start-up tenCube in 2005 which was later acquired by cybersecurity company McAfee in 2010 in a SG$25 million deal.
“This is a truly exciting opportunity to be joining forces with a global leader like REA Group, a company that also shares our customer centric, relationship driven approach,” Cheung said.
“Our JV company sets the scene for us to create the number one place for property seekers in Singapore and Indonesia and in turn provide the best value for property professionals.”
The transaction, which remains subject to confirmatory due diligence, is anticipated to be completed in the second quarter of the financial year 2020, while the new JV company will be fully operational across both Singapore and Indonesia in early 2020.