REA Group has entered into a binding agreement to establish a joint venture (JV) with Singapore- headquartered digital property marketplace 99.co.
The combined company will provide the most compelling property marketplaces in Singapore and Indonesia, while delivering the digital platforms to property professionals to help them grow their businesses.
Core to the JV company will be harnessing the know-how and capability of REA Group, who note they are the number one Australian and South East Asian digital property company, with market leading destinations for property seekers across Australia, Malaysia, Hong Kong, and Thailand.
In addition, the JV company will leverage the entrepreneurial expertise of 99.co, co-founded by CEO Darius Cheung in 2014. Under Mr Cheung’s leadership, 99.co has grown its total user base by 32 times in the past two years.
Prior to establishing 99.co, Mr Cheung co-founded Singaporean mobile security start-up tenCube in 2005, which was later acquired by McAfee in 2010 in a S$25 million deal.
REA Group, CEO 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,” Mr Wilson said.
“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.”
REA Group, Chief Strategy Officer and CEO Asia, Henry Ruiz said over the past two years REA had been impressed by the innovation and speed that Mr Cheung and his team had brought to the marketplaces they serve.
“The formidable combination of our talent, best of breed technology, digital expertise and customer relationships will supercharge our ability to compete and win in Singapore and Indonesia,” he said.
Mr Cheung noted he believed the joint venture was a “truly exciting opportunity”.
“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 JV company will be established through the transfer of the existing businesses of 99.co and iProperty.com.sg and Rumah123.com located in Singapore and Indonesia.
Existing 99.co shareholders, including the founding partners, Sequoia, Facebook co-founder Eduardo Saverin, Allianz X, MindWorks Ventures, East Ventures and 500 Startups will have shareholdings in the JV company totalling 73 per cent.
REA Group will be the largest individual shareholder with a 27 per cent shareholding.
REA Group will also contribute USD$8 million in working capital to the joint venture.
Darius Cheung will become CEO of the JV company while Henry Ruiz and REA Group Chief Financial Officer, Janelle Hopkins will represent REA Group’s interest as non-executive board directors.
The transaction, which remains subject to confirmatory due diligence, is anticipated to be completed in Q2FY20, while the new JV company will be fully operational across both Singapore and Indonesia in early 2020.
