Dubai-based property portal Propertyfinder Group has sold a ten per cent stake in its business to Sweden-listed investment firm Vostok New Ventures for US$20 million.
The deal, which gives Propertyfinder a $200m valuation, will allow the company to improve its portal to make searching easier and to develop a CRM system which it will distribute to its property brokerage and developer clients, according to the company’s founder and chief executive, Michael Lahyani.
“Technology is at the heart of what we do. We are going to continue developing our own proprietary technology.” said Mr Lahyani. He added that funding would also go towards recruiting staff and on marketing its brand within the seven countries where it currently has property portals.
The $20m investment is the second round of funding that Propertyfinder has received following an earlier investment from Dubai-based Beco Capital three years ago.
“The first round was from a local VC and this is the first big round coming from an external investor into the region,” Mr Lahyani said.
Propertyfinder was founded 10 years ago and now has more than 150 staff. It has portals listing properties in the UAE, Qatar, Bahrain, Saudi Arabia, Egypt, Lebanon and Morocco and claims one million visitors to its site each month. It has more than 100,000 listings in the UAE, which remains its biggest market.
In a statement to the Swedish stockmarket, Vostok New Ventures said Propertyfinder is “profitable in its core markets”.
Vostok New Ventures is a fund that was initially set up to invest in businesses in the former Soviet Union in the 1990s. However, it has since become something of a technology specialist and holds stakes in two large online firms — Russian classified listings site Avito and French ridesharing site BlaBlaCar.
Its managing director, Per Brilloth, said: “We have spent a lot of time mapping out our preferred niche of online marketplaces and classifieds operators in the region and are happy to partner up with Michael and his team at Propertyfinder.”
Mr Lahyani said that he had not been looking for funding when he first met Vostok New Ventures a year ago, but he was interested in tapping into its experience in the online classified sector.
However, he added that he believed it was now “the right time” for it to bring in funds to achieve its goal of becoming the biggest online real estate brand in the MENA region. He said that it was not currently looking at geographical expansion, but would instead focus on growing its share of existing markets.
“If you look at the markets where we operate it covers massive populations already.”
The deal is the second major venture capital investment in a UAE property portal in recent months, following the sale of a minority stake in Justproperty’s parent firm JRD Group in August 2015 to investor iMENA Group.
Khaldoon Tabaza, the chairman of iMENA Group, has said that it plans to make Justproperty “the cornerstone” of a regional real estate classified business into which it plans to invest $25m in two years.
mfahy@thenational.ae
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