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Australian Firm REA Group to Acquire Elara Tech, owner of Housing.com
NewsCorp owned Australian Online real estate business entity, the REA Group is set to acquire controlling stake in Elara Technologies which will become a stand- alone entity of REA Group to be led by Dhruv Agarwala and his leadership team
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Melbourne-based and NewsCorp-owned REA Group has entered into a binding agreement to acquire a controlling interest in Elara Technologies, 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, Elara Technologies said in a statement.
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, it added.
India is an important piece in REA Group’s integrated global strategy and the business plans to continue to invest in Elara to create India’s leading digital real estate business.
REA Group CEO, Owen Wilson commented: “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.
“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
“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 Dhruv Agarwala.
REA Group along with News Corp, already owns a significant minority stake in the company. The company has raised equity capital of $105 million 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 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.
Elara offers a full range of residential property services across digital advertising and transactions including personalised search, virtual viewing, site visits, home loans and post-sales services. The company began with PropTiger.com and since then it has grown significantly both organically and inorganically with the acquisition of Housing.com and Makaan.com. It is the leading full-stack digital real estate company in India with revenues growing at a CAGR of 42% over the last three years and organic traffic on Housing.com rapidly increasing at a CAGR of 56% in the period Sep ‘17-Sep ‘20.
The company is well positioned to take full advantage of attractive market dynamics with its differentiated full-stack strategy. According to Similar Web data, Elara’s platforms Housing.com and Makaan.com together have the market leading audience amongst digital real estate players in India. Its unique offering provides an end-to-end service for consumers, leading to a greater consumer experience and increased satisfaction, with an NPS score of over 74 among home buyers on Proptiger.com.
Mayank Khanduja, Partner at Elevation Capital, said: “I am pleased to see Elara become part of REA Group, one of the most valuable digital real estate companies in the world.” Prashanth Prakash, Partner at Accel, added: “Dhruv and team have done an excellent job of scaling the company to where it is today and I’m confident that with REA Group’s backing Elara can become the dominant digital real estate company in India.”