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KKR makes the right bet by investing $144 Mn in PropertyGuru

Global investment giant KKR is known for making shrewd investment decisions and its latest decision to invest $144 Mn in PropertyGuru may just help in enhancing its reputation further. If you are living in any Southeast Asian country then PropertyGuru may not need much introduction.

But for the sake of my global readers I would like to give a brief intro about this startup. Founded in 2006, today PropertyGuru is the largest online real estate portal in Southeast Asia. I guess this more than makes for a good brief intro and with this I would like to argue as to why KKR’s latest investment makes for a good business decision.

PropertyGuru Vice Chairman Steve Melhuish (centre) and CEO Hari Krishnan (right)

Well, to begin with, PropertyGuru is most probably planning for an IPO very soon. The rumors about IPO have been going on since last year and no less than PropertyGuru’s CEO Hari V. Krishnan has spoken about it. A successful IPO issues always spells good news for existing investors and KKR will wish for the same with PropertyGuru’s IPO.

Even a decently successful IPO issue would surely mean that KKR would make partial exit with a good profit while keeping minority stake intact in hope for an even better exit in future.

However, no company or startup can even hope for decently successful IPO without having strong fundamentals. And PropertyGuru surely boasts fundamentals that can sway even the biggest investors and KKR surely happens to be one of them.

To give an idea about PropertyGuru’s fundamentals then it is the undisputed leader in Southeast Asia’s online real estate portal market. All the key metrics – traffic, revenue, real estate listings – indicate that it is the most dominant player in Singapore, Indonesia, Thailand and Malaysia. In terms of market share then the startup claims to have 55% market share in all the key Southeast Asian markets.

Last year, Krishnan had claimed in an interview that PropertyGuru is recording impressive 30% growth across all the markets. He also claimed that the startup is cash positive and has very solid reserves. We can gauge about startup’s cash reserves by the fact that it had bought Vietnam’s largest real estate portal for undisclosed amount.

All said and done, PropertyGuru would make for another good addition in KKR’s portfolio. This is not, by the way, KKR’s first investment in Southeast Asian startups. The global investment giant has stakes in ride-sharing behemoth Go-jek and Thailand’s e-commerce company aCommerce.

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