99.co gets US$1.5mil, led by Eduardo Saverin, Sequoia Capital
By Gabey Goh January 30, 2015
- Has raised a total of US$2mil to date, claims over 150,000 unique visitors a month
- Interface and listings cater to buyers, but takes other stakeholders into account
SINGAPORE-based startup 99.co has announced S$2 million (US$1.5 million) in funding to further its mission of “putting people first in property search.”
This investment round was led by Eduardo Saverin, cofounder of Facebook, along with venture capital firm Sequoia Capital, its first seed investment in the Lion City. Other investors include entrepreneurs-turn-investors Ross Veitch, Royston Tay and Wu Wenxiang.
99.co has raised a total of S$2.7 million (US$2 million) to date, with a prior seed amount of S$700,000 (US$517,000) from 500 Startups, East Ventures, Fenox VC and Golden Gate Ventures in November 2014.
It had its soft launch that same month, and currently claims over 150,000 unique visitors a month with a 25% rise per month in traffic and 50% per month increase in property listings.
In addition to its touted user-centric design and interface, the company leverages ListRank, an algorithm that it said helps provide users with the best and most relevant search results. The company also has two mobile apps – one for users, the other for property agents.
The recent funding announcement also marks the online property search portal’s official launch to market, with an expansion of its services into the residential sales segment.
The residential sales segment has long been a stronghold for PropertyGuru, which claims an 85% share of the Singapore market, with 3.5 million users accessing 210,000 listings every month.
At the same time as 99.co’s soft launch last November, PropertyGuru launched its SmartSelect tool, a personalised property research engine tool which leverages on additional data from the Urban Redevelopment Authority (URA) and Housing and Development Board (HDB) to help prospective buyers shortlist properties.
“We really believe that the market needs a property search that prioritises the user – and the numbers show that more and more people on the search for the next home clearly prefer the way we cater to their needs with unbiased search results and genuine listings,” claimed cofounder and chief executive officer Darius Cheung.
“Finding a home is the biggest financial decision most people would ever make – it is also one of the most important milestones in life for one to create the right environment to develop a career, to build a marriage and to nurture a family and children; it affects everything,” he declared.
According to the Singapore Government, in 2013 the home ownership rate stood at 90.5%. The country’s rental market is almost entirely supported by expatriates.
In explaining his motivation for investing, Saverin, who is also on the 99.co board of directors, recalled his own experience in using different tools to search for a home when he first moved to Singapore.
“I was nothing short of disappointed. It was like I took a time machine back to the days of Craigslist. Were the listings real and available? Were the pricing data and other details accurate? Why [were there] so many duplicates?
“It was a high-friction and time-consuming experience that had to change,” he said.
Saverin said that most of his investments start with some form of personal experience, “where I felt that something was broken, wasn’t right or working, and that there was a simple tech solution that could be applied that could solve the problem.”
He has also invested in RedMart, a Singapore-based online supermarket that home-delivers groceries and essentials.
A mutual friend introduced Cheung and Saverin to each, and the latter recalls being impressed by the fact that not only Cheung, but the entire 99.co team attended the first meeting they had as well, including the interns.
“Which I thought was a great trait for an entrepreneur and when I asked him, ‘Why are you doing this, what’s driving you and even with interns who were there temporarily?’
“And the answer inspired me because it wasn’t about making money but about solving the problem that each of them had experienced,” Saverin said.
Cheung’s experience also played a part in the decision, with his successful exit from mobile security company tenCube, acquired by security solutions vendor McAfee in 2010.
“But beyond that it’s the passion – they’re user-centric because of that, and I think that is a very important qualification,” Saverin said.
“Because this is a challenge, and because it’s a marketplace, there are a lot of elements and stakeholders involved and you need to provide a solution where everyone wins. It’s a critical recipe for success in a marketplace environment,” he added.
Shoring up supply
While its interface and user-centric features were borne out of the team’s personal pain points and wish lists, the need to juggle the interests of multiple stakeholders was evident in the presence of many representatives from the real estate industry at the launch event on Jan 29.
Addressing the crowd, Cheung shared that there were misconceptions initially when digging into the nitty-gritty behind why most property listings were incomplete and of poor quality.
“I’m very surprised because at first I thought ‘Why don’t agents do a better job?’ and now, before shoes get thrown at me, I apologise for first thinking that.
“I know a lot of agents in real life as a tenant and as a buyer – they’re really nice people, and more than that, they are motivated entrepreneurs and they take care of the business and want to improve it,” he said.
Cheung claimed that further conversations and interviews with agents revealed that the systems in place by current portal search portals do not have incentives for listings to be complete, let alone of good quality.
Rather, they operate on a “pay to play” model which gives the highest prominence to the agent who pays the most, he accused.
“It’s a hard life, which is way we took almost a year to develop a new system and experience that is what consumers expect today, and one that incentivises complete and quality listings in search results.
“We’re growing pretty quickly and we’re still a long way from being a big player, but at this rate we hope to be pretty substantial by the end of the year. Hopefully we’ll get more agents on board,” he said.
Singapore currently has approximately 31,000 property agents, according to a recent survey released by the Council for Estate Agencies.
As part of its push to recruit more agents to the platform, 99.co is offering free use of its platform to property agents for six months, after which a subscription fee of S$35 a month or $350 a year will apply. [S$1 = US$0.74]
“It’s a no-brainer price, and if you are a big agency with a large team and would like a bigger discount, we’ll be happy to discuss that too,” Cheung said.
During a panel discussion held during the launch event, Mohamed Ismail, chief executive officer of PropNex, one of Singapore’s largest real estate companies, expressed excitement at 99.co’s official debut.
“I welcome more platforms coming into this market, that are more forward-looking. Not to say anything negative about existing platforms because they have played a role in helping us, but competition is good for any industry.
“I’m confident that anyone with a passion that translates to understanding what the ground needs and has insights to make it better, can succeed,” he said.
Ismail added that while the six months of free usage is welcome, more than anything it would be the platform’s ability to deliver action that will determine long-term patronage.
Eugene Lim, ‘key’ executive officer of ERA Realty Network, echoed a similar sentiment, noting that results for early adopter agents will determine if more will follow.
“What we liked about 99.co was the user-centric focus – you must see it from the perspective of a user and the experience is not very commercialised,” he added.
Evan Chung, vice president of integrated property services provider DTZ, said that the company gets a lot of pitches from people with new services or solutions.
“We were told about 99.co and decided to check it out, and while it seems on the light side as it’s still quite new to the market, we can see the potential,” he added.
Echoing other panellists on the key metric of lead generation for agents, Chung was more succinct in what will earn patronage: “If we get calls, we will pay – free trials or not, it doesn’t matter.”
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