CASE STUDY
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Singapore based property startup 99.co likes a challenge. Dominated by well funded regional players, there would be easier sectors to disrupt than online property. However 99.co is fighting hard with a unique proposition. The company has raised two rounds of funding since incorporation and is backed by high-profile investors including Sequoia Capital and Facebook co-founder, Eduardo Saverin.
Founder and CEO, Darius Cheung, talked to us about the company’s progress, its most recent capital raising transaction in 2015, and how they have found working with Kindrik Partners.
Darius is one of Singapore’s celebrated young tech entrepreneurs having sold mobile security startup tenCube to McAfee in 2010. This was a decent sized exit for a Singapore tech startup at the time. With the current hot funding environment and massive interest in mobile disruptive technologies in Southeast Asia, Darius is now looking to build a company for an even larger exit.
Not surprisingly, given the city state’s rapid growth, Singaporeans have always had a real interest in property. So 99.co is playing in a compelling space. Singapore has over 30,000 property agents many of which use online real estate platforms such as 99.co. The company recently set up an Indonesian website and plan to get going in Malaysia and Thailand further down the line.
99.co differentiates itself from larger competitors by promising a more intuitive search experience, where the rankings for listings are influenced by the quality of the published content. The site, for example, could favour listings with more photos or with value add information such as commute times or local amenities. This contrasts with the traditional model where the level of fees paid typically pushes classifieds higher. Darius believes that users will increasingly seek this kind of consumer friendly experience.
99.co charges agents a basic subscription fee to list their properties. The company has, however, recently launched a new product called 99PRO – a subscription model where agents can unlock additional features like interactive map searches and new data.
Darius agrees that the competition is tough to crack in Singapore and the region, given the dominant players. Content is king – the number of listings is fundamental to the success of the business. Bridging the gap, and chasing the platforms that have the majority market share, requires innovative offerings. Plus it’s a crowded market. Aside from other startups trying to challenge those established players, print media still retains a surprisingly sizeable chunk of the market.
The nature of 99.co’s subscription model means the company will need to add alternative revenue streams over time.
Finally, talent acquisition in Singapore and building the 99.co team has been difficult given the number of other startups also hiring sought-after developers.
Lee Bagshaw was introduced to Darius by one of 99.co’s investors. Lee has helped the company through each of its financing transactions. Most recently in 2015, Lee, supported by Chris Wilson, advised on the company’s series B transaction led by Sequoia and Saverin.
Darius’ previous view on lawyers had been that they were expensive and it was not always easy to see their value. He describes working with Lee as a breath of fresh air. Whether by email, on the phone, by WhatsApp or even in the passenger seat of Darius’ car, Lee’s advice was always simple to understand, but with real value add.
Darius was impressed with Kindrik Partners’s knowledge of VC financing deals in Southeast Asia. He says Lee and the team were also very fast, generally turning documents around in under 24 hours. Darius believes that, by working for a tech focussed firm, the Kindrik Partners lawyers have a greater connection with startup founders, combined with unique experience. Throughout the negotiations, Darius found that even if the company could not secure the best outcome on all points, Lee and Chris ensured that he understood clearly the implications, so he could quickly move on.
99.co are operating in an exciting space in Southeast Asia. Real estate tech companies globally have grown rapidly, achieving some astonishing valuations.
Sequoia’s and Saverin’s backing shows that notable investors are looking carefully at this space in Southeast Asia, particularly for platforms that are distinguishable from the others.
Kindrik Partners will be closely watching 99.co continue its growth to become a significant online property player in Southeast Asia.
Explore 99.co.
[Note: The firm’s name was changed to Kindrik Partners in July 2020 and references to the firm’s previous name have been updated.]
