LocalAgentFinder raises $5.5 million in News Corp-led round, continues to mull over ASX listing
Monday, March 5, 2018/
A slew of News Corp-owned entities have led a $5.5 million funding round for Melbourne real estate startup LocalAgentFinder as it mulls over pursuing an ASX listing towards the end of the year.
LocalAgentFinder was established in 2007 by founders Rupert Greenhough and Andrew Menzies with the objective to provide home sellers with a greater amount of information on available real estate agents, which sellers should expect to have “at their fingertips” in the digital age.
Speaking to StartupSmart, LocalAgentFinder chief executive Matt McCann says the business gap for the startup was obvious for the founders when house sellers were limited to driving around looking at billboards to garner information on real estate agents.
“This is in a universe where information is always available, so the founders wanted to close the gap on where the information is, and make it accessible and comparable as it is for other industries like insurance and energy,” he says.
If McCann mulling a potential ASX listing sounds familiar, that’s because the chief executive said similar things when he spoke to StartupSmart a year ago after LocalAgentFinder raised a similar amount of investment, in a round led by Wentworth Global Capital Partners.
At the time, the company’s plan was still to pursue an initial public offering amongst other options and McCann says those views haven’t changed. But this month’s capital raising has given the startup more “optionality”.
And while the recent spate of struggling listed tech companies have “definitely” changed the company’s view towards the market and the timing of its potential listing, it hasn’t dampened McCann’s appetite.
“In the second half of this year we’re looking to make a decision, but that could be to pursue an IPO, look at a trade sale, or stay private,” he says.
Commbank partnership complements raise
Although the startup’s raise amounts are similar, and less than 12 months apart, McCann says LocalAgentFinder has changed its product and execution “quite a lot” in that time, while also continuing to push its brand into the market through various partnerships.
One such partnership is with big four Australian bank Commonwealth Bank. Announced last week, the partnership will mean Commonwealth Bank customers looking to sell their home will be offered a way to assess available real estate agents through the LocalAgentFinder platform.
“LocalAgentFinder’s platform will give customers an independent comparison and is a good example of Commonwealth Bank partnering with experts to provide more value for our customers to help them realise their property goals,” Carrie Fox, Commonwealth Bank general manager, said in a statement.
LocalAgentFinder’s investor who led this most recent $5.5 million raise is News Corp’s Scaleup Mediafund, which consists of News Corp Australia, along with Network Ten, Nova Entertainment and Fox Sports Australia. Also participating in the round was Spheria Asset Management and an array of existing and institutional investors.
McCann says the media-centric investment will go a long way in getting LocalAgentFinder to the “next level”. Media and advertising insights can be one of the biggest costs to a scaling startup, he says, and the News Corp partnership will give the company strong access to those channels.
In a statement, fund manager at Scaleup Mediafund Michael Lamont said the investment is a ”fantastic opportunity for Scaleup Mediafund to put our media to work and contribute to creating an even larger business”.
“We will work with LocalAgentFinder over the next few years to ensure that it gets the best outcome that our advertising fire power can deliver,” he said.
Reflecting on the significant number of real estate focused startups receiving funding or gaining prominence, McCann believes the Australian property market is seeing a second wave of innovation; the first wave crested almost a decade ago around real estate portals and access services.
“It’s now around the potential to deliver agents with vendors and how agents interact with the market themselves, and how they conduct transactions. Australia is a very valuable real estate market,” he says.
“And the VC and institutional investment community are starting to step behind that.”