REA Group Ltd has announced that it had entered into a binding agreement to acquire a controlling interest in Elara Technologies Pte. Ltd, the owner of Housing.com, PropTiger.com and Makaan.com, in a deal that includes cash and newly issued REA shares.
The transaction is expected to close in the current quarter, subject to confirmatory due diligence.
“India is an incredibly attractive market and one that provides excellent long-term growth opportunities, while complementing REA’s footprint in Australia, Asia and North America. The country is forecast to deliver strong growth over the next decade as it continues to experience rapid digital transformation,” said Owen Wilson, CEO - REA Group.
“We plan to make significant investments in Elara going forward. With over 700 million internet users and roughly half a billion yet to come online, our increased investment in Elara will allow REA to be at the forefront of the considerable long-term opportunities within India, and the digitisation of the real estate sector,” he added.
Elara will continue to operate as a stand-alone entity within the REA Group structure. Dhruv Agarwala, co-founder and CEO, along with the current leadership team, will continue to lead the company.
“We are delighted with REA’s increased involvement in our business and the ability to collaborate more closely. I remain excited about the digital real estate opportunity in India and we are committed to our unique full-stack strategy as we focus on building leadership.
“With access to capital and expertise from REA we will continue to launch new products in the market to enhance the consumer experience and make the process of home buying, selling and renting simpler, more digital and more transparent,” said Agarwala.
“Elara has a well-established, high-calibre management team with extensive experience across both the digital marketplace and real estate sectors. We believe that the company’s differentiated full-stack strategy will emerge as the winning model going forward. This transaction creates a unique opportunity to leverage the combined talent and digital expertise of REA and Elara to become the market leader in India,” Wilson said.
REA Group along with News Corp, already owns a significant minority stake in the company. The company has raised equity capital of 105 million dollars to date from News Corp, REA Group, Elevation Capital, Softbank and Accel, among others.
This is an opportune time for the transaction given the massive acceleration in digital adoption in all categories over the last six months because of the COVID-19 pandemic. There is a clear market acceptance and buy-in for digital solutions in real estate.
Housing.com has seen organic traffic on its platform increase by more than 70% since February this year. The Indian real estate market is significant, with the current market size estimated at 180 billion dollars and projected to grow at a CAGR of 19% over the next decade.The digital real estate classifieds advertising market is expected to grow at a CAGR of 29% until 2025, which provides the opportunity to build a big and profitable business, the company said.