The Southeast Asia startup ecosystem has been gaining traction with blank-check companies lately, with many investors and speculators looking to take businesses from private to public. More than 40 special purpose acquisition companies (SPACs) are eyeing the region as startups continue to perform, and the budding technology hub is now giving the original Silicon Valley a run for its money.
One giant merger that has taken place recently is the PropertyGuru SPAC deal. Singapore’s prolific online real estate enterprise has taken stock of the recent possibilities of going public and agreed to merge with Bridgetown 2 Holdings Ltd. This blank-check company, backed by billionaire entrepreneurs Pacific Century Group’s Richard Li and Peter Thiel of Thiel Capital, is looking to take the growing presence of the PropertyGuru group and give the public a chance to get in on this rising star of the property market in Singapore.
A billion-dollar deal
According to a Bloomberg report, the two companies merged to form one entity, which was announced in late July of this year. The result of that merger has led to an impressive market value of $1.78 billion USD. By opening up private investment in public equity (PIPE), the combined company opened up a $100 million USD door for investors such as Baillie Gifford, Naya, Australia’s REA Group Ltd., and Akaris Global Partners. Reports also state that REA Group has put up another $32 million USD.
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The company will list on the New York Stock Exchange with the market value of $1.78 billion USD and the enterprise value of $1.35 billion USD. Back in 2019, PropertyGuru set its sights on the Australian Securities Exchange (ASX) but ended up pulling the plug on it shortly after exploring its options. This new merger will correct the failed attempt of two years ago when PropertyGuru’s valuation was set at only $881 million USD.
The COVID impact
The pandemic impacted economies globally, but the startup scene in Southeast Asia performed well despite the changes in economic spending and downturns. In fact, the pandemic has driven PropertyGuru’s success this year by inducing a boom in the real estate market in Singapore. Home prices have reached an all-time high in the region. Not only that, the company’s ability to expand into other markets such as Vietnam, Indonesia, Malaysia, and Thailand have made it the largest marketplace for real estate in Southeast Asia.
The sector’s boom in the region results from buyers looking to expand their spaces and improve their living conditions due to spending so much more time at home. This steady climb of business in the real estate market has a role to play in the ever-growing success of PropertyGuru. The latest merger is just one more step on the ladder to the top for the soon-to-be public company.
Investor trends in Southeast Asia
PropertyGuru, founded by Steve Melhuish and Jani Rautiainen in 2007, has gained household name status due to the region’s growing real estate market. Although billionaires Richard Li and Peter Thiel have driven the merger, they won’t be the only ones benefiting from the latest future real estate giant to hit the New York Stock Exchange. Other existing shareholders such as KKR, TPG Capital and REA Group will keep their more than 70% ownership over the company when it does hit the public floor.
The investor interest in Southeast Asia is not lost on the company’s heads, and more startups are looking to make these types of deals with blank-cheque firms. Singapore’s largest startup – ride-hailing, food delivery and digital payment company, Grab Holdings Inc., is also looking to enter the public domain by making a deal with a blank-cheque firm by the end of this calendar year. Bukalapak.com, Indonesia’s e-commerce firm, is also setting itself up to be listed on a local exchange in August of this year, with GoTo, the biggest tech startup in Indonesia, following closely behind them.
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Although the transaction has not been completed yet between PropertyGuru and Bridgetown 2 Holdings Inc., it is likely to do so in the fourth quarter of this year or the first quarter of next year, when trading will begin. The reports of the talks between PropertyGuru and Bridgetown first made news in June of this year, and since the initial public offering took place in January, the SPAC had raised roughly $300 million USD.
There is no doubt that the Southeast Asia startup ecosystem is turning the heads of investors all over the globe. The area has churned out some of the most prominent players in the digital and e-commerce industry in recent years, and it continues to impress in a big way. The PropertyGuru SPAC deal is just one of many that will surely hit the public floor of the New York Stock Exchange next year.