As of 11am this morning, Sydney-based tradie marketplace startup Hipages is live on the ASX.
The initial offer to retail and institutional investors raised just over $100 million, based on a price of $2.45 per share. That gives the now public business an enterprise value of $286.8 million and a market cap of $318.5 million.
The IPO comes some 16 years after co-founders Robert Sharon-Zipser and David Vitek launched the business as a home improvement directory.
In 2011, the business pivoted to become a marketplace connecting tradies to people who needed odd-jobs done in their local areas. And in 2014, Hipages launched a subscription product.
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Since November last year, it’s been running with a subscription-only business model for any new service providers on the platform.
Tradies pay a monthly fee to have their services listed on the Hipages platform. The marketplace service remains free for the consumers posting jobs.
Today, according to its IPO prospectus, Hipages has about 36,000 paying trade businesses subscribed to the platform.
The platform has also seen growth in the number of jobs posted. Some 3 million consumers have used the marketplace, posting more than 6.5 million jobs.
About 1.4 million of those jobs were posted in the 2019-20 financial year alone, marking a 23% uptick on the previous year.
The business also saw a 43% increase in jobs posted in the June quarter of 2020, suggesting resilience in the face of the COVID-19 pandemic, despite restrictions on tradies entering homes.
The listing is just the latest Aussie tech IPO.
Last month, Adore Beauty raised $269.5 million in its ASX debut, 20 years after the beauty marketplace was founded.
Edtech OpenLearning also raised $8 million in its oversubscribed IPO offering in February 2020, and BigCommerce listed on the NASDAQ back in August, seeing its share price climb by 200% on its first day of trading.
“I feel really proud, really excited,” Sharon-Zipser tells SmartCompany, on his way back to the office after ringing the bell.
For the founder, today represents a realisation of his hard work over the years, and — perhaps even more so — that of his employees, who are now all shareholders too.
“They are, at the end of the day, the powerhouse of the business, delivering the product and service to our customers,” he says.
“Empowering them to do more … that’s a really, really strong position to be in.”
In Hipages’ prospectus, chair Chris Knoblanche suggested the platform acts as “an essential part of [tradies’] marketing program and business success”.
The growth strategy from here on out is focused on improving the core business and “growing into adjacent services”, he added.
Indeed, in February 2019, Hipages acquired Call of Service, a field service software solutions business allowing tradies to manage their workflow and leads through the same platform.
Knoblanche said the listing will “position the company for further success”, allowing it to further build on its brand.
The successful IPO sets the business up for a strong 2021, Sharon-Zipser adds.
“The balance sheet is going to be really strong, and we don’t carry any debt,” he explains.
And, even in the wake of the COVID-19 pandemic and disruption in the market, Hipages remains in a good position.
“We’ve seen a surge in demand from consumers as they’re not travelling as much,” he says.
“We’ve seen really positive movements.”
With that in mind, if there’s one thing Sharon-Zipser says he’s learnt from 16 years of Hipages, growing the business from a garage to the ASX, it’s one of changeability.
“There are incredibly smart people around,” he says.
“You should listen, adapt, be agile. The world is moving in a crazy way.”
It all comes down to meeting the needs and demands of your customers, he adds. After all, if you don’t have customers, you don’t have a business.
The trick is to focus on making a product people want to use, he adds, although that’s easier said than done.
“It’s not a simple thing to do,” he says.
“But, you know when you’re winning when people keep using your service again and again.”
Timeline to IPO
Robert Sharon-Zipser and David Vitek launch Hipages from a garage, creating a humble directory for trades businesses.
The founders make the strategic decision to pivot into an online marketplace.
Hipages partners with Ikea, offering customers a fast way to receive quotes for the installation of kitchens.
Hipages raises $6 million in funding, including from Aussie VC Right Click Capital.
That same year, the startup introduces its monthly subscription model.
NewsCorp invests a reported $40 million for a 25% stake in Hipages, giving the business a rumoured valuation of $160 million.
Hipages comes in at number 40 in SmartCompany’s Smart50 awards, having secured $24.2 million in revenue in the previous financial year, and a three-year revenue growth rate of 81.4%.
In the same year, Roby Sharon-Zipser makes the Australian Financial Review’s rich list, worth an estimated $19 million.
This time, Hipages is ranked number 29 in the Smart50 awards, having recorded revenue of $32.6 million in the previous financial year, and revenue growth of 99.8%.
At the time, the co-founders said they were supporting about 100,000 every month.
Hipages partners up with Bunnings, with the home improvement giant offering customers access to tradies to help with installations of things such as toilet suites, taps and ceiling fans.
Hipages moves to a subscription-only sales model.
Hipages acquires Call of Service, bringing additional business management capabilities to the platform.
Hipages lists on the ASX.