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Singapore’s 99 Group to expand in RI with $52m in fresh funds
As the company announced on Thursday, the Series C funding will come in two phases: $37 million at first closure, with the other $15 million coming in successively over the following months.
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Singapore-based property-technology (proptech) start-up, 99 Group, has secured US$52 million, with which it plans to get a stronger foothold in Indonesia and Singapore as well as expand to new markets in the region.
As the company announced on Thursday, the Series C funding will come in two phases: $37 million at first closure, with the other $15 million coming in successively over the following months.
“We see remarkable opportunity in the middle of this uncertain global market […], and we believe in the growth of the Southeast Asian market. […] Having a strong balance sheet enables us to react swiftly and firmly toward potential [mergers or acquisitions],” 99 Group CEO Darius Cheung said in a press release.
Providing information and transaction platforms for real estate markets, proptech has been described as a disrupting force in the real estate sector, where it reduces paperwork and expedites transactions through technological solutions for listing, searching, selling, buying and managing properties.
Hong Kong-based real estate investment firm GAW Capital Partners led the Series C funding, saying it was impressed by 99 Group’s portfolio that included several property platforms, namely 99.co, Rumah123.com, iProperty.com.sg and Singapore Real Estate Exchange.
“We are very optimistic about the Southeast Asian market, and this investment we do at 99 Group is the right step to take,” said Humbert Pang, managing principal, head of China and co-chair of alternative investments of GAW Capital Partners, in the release.
“In every market, there will always be a marketplace that leads in proptech that becomes a property supperapp. We saw that in [Chinese property-broker platform] Beike, and now we see that in 99 Group,” said GAW Capital Partners director Herbin Koh, hinting that the funds may also be allocated toward developing a superapp.
99 Group Indonesia CEO Wasudewan explained that the company was focusing on advancing the market in Surabaya, Bandung, Surakarta, Semarang and Makassar.
“We are hoping to become part of a property ecosystem on the regional level with the product and technology we have,” he said in the release.
Jianggan Li, CEO of Momentum Works, a venture outfit that pays close attention to the Southeast Asian region, explained that there were four different types of business models for proptech: listing/advertising, digital brokerage, financing and property management.
“Globally, the only proven model is listing and advertising. Digital brokerages often struggle with scale, as property buying in most countries still involves a lot of offline elements, not to mention trust. The sector can't be fully digitized. We believe that it is the same case in Indonesia,” said Li, assessing the prospects of proptech blooming in Indonesia.
“The only exception globally is probably [Chinese proptech firm] Ke Holdings. They started with building one of the largest offline brokerage networks in China, accumulating the most comprehensive and accurate property database in China, before [going] digital. Chinese investors have been searching for similar models in other countries, and thus far they have not found any that is as promising.”
Eddi Danusaputro, president of the Indonesian Venture Capital and Start-ups Association (Amvestindo), said 99 Group may be able to compete in the rental segment, but the property buying and selling market in Indonesia had distinct characteristics.
“In Indonesia, property selling and buying lean more toward premium market. […] As far as I’m [aware], people only use these property platforms to find information, but the transaction mostly takes place with brokers, as people trust them more,” Eddi said.
“Especially in the primary market, these start-ups must compete against so many property developers. Proptech is a very niche market, so they should focus on developing their application features, like 360-degree views for example,” he added.
When asked about how 99 Group may use the fresh funds, Li said: “Theoretically, you can offer most property-related services, from buying to renovation and property management, through a single platform. Practically, there isn't much synergy among all these services for consumers, as buying property is not an activity they do frequently -- things might be different for property managers and agents, but that's a much smaller market.”
