Hari V. Krishnan, CEO of proptech unicorn firm PropertyGuru, needed to act fast when the pandemic hit. “We told ourselves that these were going to be a tough couple of years,” he told KrASIA.

Founded in 2007, PropertyGuru has grown to become a household name in Southeast Asia’s real estate sector, thanks to its property listing portal that connects buyers, sellers, and agents. The company lists over 2.8 million properties in markets including Indonesia, Malaysia, Singapore, Thailand, and Vietnam, serving 50 million monthly property seekers and 50,000 active real estate agents.

Like many other companies involved in the real estate business, PropertyGuru was strongly affected by the pandemic in 2020. “The construction sites were shut down. In addition to agents not being able to take clients to visit properties, foreign buyers couldn’t travel freely around either. For example, Chinese buyers own a lot of real estate in Thailand, but none of them could travel,” Krishnan said. In 2020, the company recorded a near 7% decrease in revenues, from USD 66.6 million in 2019 to USD 61.9 million in 2020.

Asia Pacific’s real estate sector also saw investment volumes dropping last year—38% year-on-year in Q3 2020—while cross-border investment logged a 23% YoY decline in the same quarter, according to data from analysis firm Real Capital Analytics (RCA).

Today, the real estate outlook is still uncertain, according to a report by accounting firm PwC, which highlights how the pandemic is preventing potential buyers from traveling abroad to visit properties, while property sellers are refusing to apply discounts to their assets in the hope that the market will rebound as the vaccination campaign will continue.

Krishnan, who joined the company in 2016, did not keep his arms crossed when the pandemic spread throughout Southeast Asia. He decided to leverage technology to tackle some pressing problems, while looking to expand his business with new fintech and cloud services.

In May 2020, PropertyGuru introduced StoryTeller, an app that allows users to visit properties through virtual reality technology. Once a customer is interested in buying, they will be connected to a booking agent as well as a payment gateway that allows the buyer to make a payment for the initial block, Krishnan explained.

Services like StoryTeller are powered by FastKey, an in-house cloud platform that provides real-time data-backed inventory management and support to different administrative tasks such as unit booking, paperwork generation, and deposit collection. According to the company, the software “digitizes and automates the entire property sales process from project launch to close of sale.” The platform has already been used by over 100 property developers in Southeast Asia, said the firm.

Last April, the proptech firm also expanded into home finance, with the launch of PropertyGuru Finance, an online mortgage marketplace that allows users to compare and select loan options with the advice of experts, according to the company. To run this service, PropertyGuru has partnered with major banks in Singapore, including Citibank, UOB, Standard Chartered, and Maybank.

The new platform monetizes through commissions obtained after mortgage fulfillment and through advertising. So far, PropertyGuru Finance has generated over “a billion Singaporean dollars (USD 741.6 million) in the loan book” within a year, according to Krishnan.

PropertyGuru expects to generate up to 96% of revenue in 2021 from its digital marketplaces, while fintech and data services will account for 4% of revenue, according to the company. Last year, the firm logged a USD 10.9 million loss, down 62% from USD 29 million in 2019.

Becoming a single source of property data

PropertyGuru’s vision goes beyond the property classifieds business. The firm wants to become the leading property data provider in the region. “We want to become the single source of truth when it comes to real estate data in Southeast Asia,” Krishnan said. Revenue from data services is projected to rise from USD 1.2 million in 2021 to USD 11.8 million in 2025, while its fintech revenue is expected to jump from USD 1.9 million this year to 16.2 million in 2025, according to the company.

To follow this goal, the firm has been active in its acquisition strategy. In August, It completed the acquisition of Australian real estate classifieds portal REA Group’s assets, which operates portals in Thailand and Malaysia. Previously, in November 2020, it acquired Malaysian property data firm MyProperty Data.

Disrupting the real estate industry doesn’t come without challenges, according to Krishnan, due to heavy regulations that affect the sector. Unlike entertainment or e-commerce, the “regulatory drag” in the real estate business sector is relatively higher in Southeast Asia and the world, which slows the industry’s digital transformation, Krishnan explained.

“As a technologist [myself], it is a fair criticism that we [the industry players] aren’t moving fast enough. The risk of getting it wrong in our sector can be much higher than in any other field. If you mess up, you could create tremendous damage to the whole society,” the CEO said.

Krishnan drew a comparison between PropertyGuru and his previous company, LinkedIn, where he served as the vice president of Asia Pacific for over six years. “LinkedIn tried to make recruitment more efficient. It became a tool for the recruiters,” he explained. PropertyGuru sees itself as a problem-solver to create efficiency and transparency in Asia’s real estate sector, which lacks a unified source of realty data, Krishnan said.

All the way to SPAC

Singapore-based PropertyGuru is expected to go public in the US soon. Photo courtesy of PropertyGuru.

In July, PropertyGuru announced that it would merge with Bridgetown 2 Holdings in a SPAC move that will list the proptech company on the New York Stock Exchange. The deal, which would give the Southeast Asian company a USD 1.8 billion valuation, is expected to close in Q4 of this year or Q1 2022. Krishnan didn’t share more details about the development but said that PropertyGuru is focused on its “vision and purpose-driven business.”

“What has driven our success in the recent past is that we focus on doing a few things and do them well. There is a USD 8 billion total addressable market across our five markets in Southeast Asia. That is very large.”

Krishnan also revealed that a secondary listing in the future is a plausible option. “We will focus on the business strategy over the next three to five years. After that, if there is a need to raise more capital, we will reserve the right to either do a secondary issuance in the US or a secondary listing in Asia, whether in Singapore or Hong Kong. We have not decided yet.”

Despite the difficult times, the company is confident about its outlook. PropertyGuru projects 22% YoY revenue growth to USD 75.7 million this year, then 44% in 2022 and 30% in 2023.

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