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Thread: Carousell in talks to buy property marketplace 99.co ahead of SPAC deal

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    Default Carousell in talks to buy property marketplace 99.co ahead of SPAC deal

    Carousell in talks to buy property marketplace 99.co ahead of SPAC deal

    Feb 08, 2022

    ONLINE classifieds company Carousell is in talks to acquire Singapore-based property marketplace operator 99 Group ahead of a potential public listing in the US this year, according to people aware of the development.

    The acquisition is likely to give a boost to Carousell’s monetisation strategy as it doubles down on high-value transactions and shapes up for the public market, one of the sources said.

    Negotiations with 99 Group are ongoing and they might not result in a deal, another source added.

    Tech unicorn Carousell is eyeing a Nasdaq listing through a merger with L Catterton Asia Acquisition, the blank-cheque company backed by US$30 billion buyout firm L Catterton, Bloomberg reported in January.

    The transaction could value the combined entity at US$1.5 billion, the report said.

    Acquisitions have been key to Carousell’s growth strategy in the past years as it evolved beyond a free-to-use peer-to-peer portal. The Singapore company is expanding in high-ticket categories such as property, automobile and luxury goods, chief financial officer Edwin Chan told The Business Times last September.

    A deal with 99 Group would give Carousell access to 99.co, a property search portal operating in Singapore and Indonesia.

    99 Group also operates data provider Singapore Real Estate Exchange (SRX), which it acquired in 2020, as well as iProperty.com.sg in Singapore and Rumah123.com in Indonesia, which it assumed control of following an agreement with REA Group in 2019.

    Carousell and 99 Group declined to comment when queried about a potential deal.

    Both are among the batch of companies minted in the early days of Singapore’s startup scene. Their common shareholders include pioneer venture capitalists Quest Ventures, East Ventures, 500 Southeast Asia, Golden Gate Ventures and Sequoia Capital India. 99.co chief Darius Cheung is also an angel investor in Carousell.

    Cheung and Yan Phun, both alumni of the National University of Singapore (NUS), launched 99.co in 2014 together with Conor McLaughlin.

    The startup has expanded significantly but still faces fierce competition from incumbent PropertyGuru, which in July last year announced plans to go public through a blank-cheque company backed by billionaires Richard Li and Peter Thiel.

    Carousell started nearly ten years ago after NUS friends Quek Siu Rui, Marcus Tan and Lucas Ngoo were inspired by a university programme in Silicon Valley. The business has since expanded to 8 markets across South-east Asia, Taiwan and Hong Kong.

    The startup was valued at US$1.1 billion in September 2021 after a US$100 million fundraise, during a bumper year that saw several South-east Asian startups burst into the unicorn club.

    But Carousell’s ambition of going public comes as investors curb their appetite for growth stocks amid concerns over the Federal Reserve’s rate-hike plans. So far this year, the tech-rich Nasdaq index has slid 11.5 per cent.

    Meanwhile, Grab is down 39 per cent from its first-day close after listing in December. E-commerce company Bukalapak’s shares have fallen more than 60 per cent since going public in Indonesia in August.

    Investor fondness for Carousell could bank on the company’s ability to significantly increase its revenue and show positive margins. Its topline in 2019 was US$15.7 million, according to regulatory filings, though that might no longer reflect the financial status of the company.

    Carousell has been bringing companies under its wing in a bid to achieve economies of scale and deepen its footing in new business verticals. Last year, it bought online sneaker-marketplace Ox Street for an undisclosed amount.

    Other acquisitions include Telenor Group’s 701Search, OLX Philippines, mobile-first used car marketplace Caarly and OneShift, which helps sellers transact with a network of dealers through a bidding process.

    Carousell said last year that its automotive business is now its largest vertical, contributing to a third of overall revenue.

    In January, it launched a platform for advertisers to target audiences across the Internet, driven by buying, selling and search data signals generated from the Carousell’s tens of millions of monthly users.

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    Default Re: Carousell in talks to buy property marketplace 99.co ahead of SPAC deal

    An initial public offering (IPO) is used by a SPAC to generate funds for the purpose of acquiring an existing functioning firm. In lieu of launching its own IPO, an operational business can merge with (or be bought by) a publicly traded SPAC and become a listed company. For more details visit: jeep on 30 Inch rims

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