‘SEA certainly sees consolidation in sectors where small players can’t compete’: Darius Cheung of 99.co

In what is considered to be one of the most significant consolidations in the realty-tech market in Southeast Asia in the recent past, 99.co has acquired and formed a joint venture with REA Group’s consumer brands iProperty.com.sg in Singapore and Rumah123.com in Indonesia. As part of this deal, 99.co also received US$8 million investments from REA, which runs many prpoerty portals across Southeast Asia. With this, 99.co, which is currently #2 in the market, hopes to become the market leader, says its Co-founder and CEO Darius Cheung.

In this interview, Cheung shares with us what this consolidation means for the Southeast Asian realty market and the company’s future plans.

Below are the edited excerpts:

What do these acquisitions mean for 99.co as well as the real estate market in Southeast Asia?

Darius Cheung: To to be clear, this is a joint venture where REA is investing in the JV, and consolidating with 99.co to continue operation of their successful team and asset in Singapore (iproperty.com.sg) and Indonesia (Rumah123.com).

What this means is that, in combination, we will be instantly market leader in Indonesia and prime positioned to take market leadership in Singapore as well.

For property seekers, it means we would be able to bring much more comprehensive choices, including many listings that would be found exclusively on 99.co and iProperty, in the short term.

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In the long term, we would be able to bring in more innovation, as this allows us to double down on R&D, targeting to take our R&D headcount from 70 today to double that to 140 in 12 months.

Do these developments indicate that the Southeast Asia market is now mature enough for consolidation? Or does this portend a bad time ahead?

DC: I suppose you are referring to tech startups in general.

While those are both relevant ways to view the market, I think the Southeast Asian tech has more of a character that the big gets bigger, that the scale itself is a competitive strength. This is true across the many areas ranging from the user base, data, talent, to capital.

To answer your question, we certainly see consolidation in sectors where small players simply cannot compete, ride-hailing and mobile wallet being the most obvious examples. 

While global capital liquidity may be hit in the mid-term, Southeast Asia will continue to rise (maybe even accelerate) as it’s one of the few remaining markets that continue to grow.

Some news reports indicate that the REA-99.co JV will affect PropertyGuru’sPropertyGuru’s IPO plans…

DC: No comments.

REA runs many property portals across Southeast Asia. What prompted it to form a JV with 99.co instead of going alone? Did the sluggish economy lead to this JV?

DC: Market dynamics is one of the critical reasons — in the Indonesia market, this would put us immediately as a market leader up from an even three-horse race. 

In Singapore, we are already #2, but with this boost, we can gun for market leadership over time. So in both cases, these are clear wins.

I think the fact that we have also demonstrated consistently over time that we continue to innovate to create value for end-users, grow and take market share, develop a sustainable monetisation model gives us the confidence that a combined future is going to help us 10x in speed and results.

Will this JV affect jobs at 99.co, iProperty and Rumah?

DC: We are a fast-growing company, and we have well over 50 openings listed on our site. We are hungry for talent and will continue to develop our team.

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Southeast Asua startups routinely rank talent as the #1 challenge — this is a massive boost for us. It will enable us to have a much bigger talent pool within the company, to map out and focus our talent where they are best at so both the combined company and the team individual can excel and grow in their roles.

World over, the realty market has been going through a rough patch for long. What does it mean for the realty-tech market? What lies ahead for the companies in the sector? Will we see more shutdowns and JVs shortly?

DC: I am not sure if that is true. Proptech investment has been on the rise consistently. Unicorns are being minted across the world — open-door, compass, ke.com, quintoandar – many more to come (real, sustainable ones).

How bleeding-edge tech like AI and blockchain are going to transform the global realty-tech market?

DC: They don’t matter right now.

Do you plan to acquire or form JV with more companies in Southeast Asia?

DC: Probably.

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