In October, Singapore-based proptech firm PropertyGuru was gearing to go public.
They lodged an Initial Public Offering (IPO) prospectus on the Australian Securities Exchange (“ASX”), and were expecting to raise around A$363 million (S$338 million).
However, before the month was over, the company announced their decision to withdraw.
PropertyGuru cited “uncertainty in the current IPO market” for their sudden change of mind, but also added that the company doesn’t require new funds from the IPO to sustain its current operations.
The funds raised would have been used for expansion, acquisitions, and developing new offerings.
“Should the Company seek new funds to support our identified growth opportunities, we have a committed existing shareholder base as well as access to private capital markets,” said PropertyGuru Chairman Olivier Lim.
Regrouping And Trying Again?
But PropertyGuru’s IPO ambitions are not buried away deep.
Today (19 December 2019), Bloomberg reported that the firm could return to make its next attempt as soon as next year if market conditions are favourable, according to its CEO Hari Krishnan.
One of the factors that hindered their initial plans was a rather bleak outlook on the Australian IPO market in general.
The total value of withdrawn IPO sales in Australia rose to US$1.5 billion in 2019, from about US$410 million in 2018.
PropertyGuru had chosen Australia because other digital property companies Domain and REA Group were listed there.
However, Krishnan revealed they might consider a wider range of options in the future, with a possibility of listing in Singapore or the US.
The Money Matters
On the other hand, IPOs have recently been giving startups reality checks and sizing down some of their grandiose valuations.
Uber is a clear example, dropping from its US$76 billion private valuation before its May IPO, to a market cap of just US$49 billion in October.
PropertyGuru also faced doubts in their proposed valuation when they lodged their prospectus with an indicative price range of f A$3.70 (S$3.45) to A$4.50 (S$4.20) per share.
Apparently, demand from investors was weak, and most were only keen to take up shares at the lower end of the price range.
However, Krishnan backed up PropertyGuru’s proposed valuation, as he pointed out that the company is free cash flow positive, and has been seeing revenue grow by over 25% year-on-year since 2016.
Their prospectus revealed that revenue is expected to hit US$85.6 million in 2019, a 44% growth from 2018.
Their net loss is also expected to be much lower at US$6.1 million this year, compared to US$12.9 million in 2018.
Through their preparation to be IPO-ready, Krishnan said PropertyGuru is likely to start voluntarily disclosing financial statements in the future.
The firm has declined to share more details about how they will determine when the time is right for their second IPO attempt.
Featured Image Credit: PropertyGuru