Shock as PropertyGuru Shutters FastKey and Pulls Out of Indonesia

The Southeast Asian real estate portal operator PropertyGuru has announced that it is to shutter two of its businesses in an attempt to streamline operations.

In a shock move the publicly traded company said that it is pulling out of the Indonesian market and is closing down its Saas-based developer sales platform FastKey.

In a statement emailed to employees and posted on the company website, CEO Hari V. Krishnan said:

"As we navigate the future, it is imperative that we continue to review progress and periodically streamline our operations while carefully re-prioritising our resources where necessary. Our efforts and focus must be towards businesses that are already driving or have shown the potential to achieve scalable growth while ensuring strong unit economics. "

PropertyGuru operates real estate portals in five markets in Southeast Asia. The Singapore-based company is dominant in its lucrative home market and also holds market-leading positions in Malaysia, Thailand and Vietnam.

Indonesia has always remained the one market that PropertyGuru has not been able to achieve dominance in.

The company entered the market in 2011 and then went on to acquire the challenger portal RumahDijual in 2015, consolidating traffic to its main portal Rumah.com. Despite this PropertyGuru has consistently been playing catch up to rival portal operator 99 Group in Indonesia.

Indonesia remains in its infancy as far as agent and developer commissions are concerned and PropertyGuru's 2021 prospectus estimated that the country would only account for 1.4% of group revenue by 2025.

Since its IPO in March 2022, PropertyGuru's Indonesian business has been reported along with its Thai market in its 'Other Asia' business segment.

Notwithstanding a couple of bumper quarters in Thailand, the 'Other Asia' segment has not been consistently profitable for PropertyGuru and the company's latest quarterly report mentions that Indonesia is not considered a "priority market".

Krishnan's message mentioned that 61 PropertyGuru employees would be laid off in Indonesia with the company offering enhanced severance packages, healthcare support and assistance with their job searches.

While PropertyGuru's Indonesian business will cease operations by November 30th, FastKey will be phased out gradually with clients in Indonesia losing service at the end of July 2024 while clients in Malaysia and Singapore will retain support until October 15th 2024.

FastKey (formerly ePropertyTrack) was purchased by PropertyGuru in 2015 and serves as a Saas-based developer sales platform that enables end-to-end project management from launch to sale.

The company has never broken out FastKey's performance in its financial reporting but there had been some industry chatter that it had not been performing as well as expected.

Although PropertyGuru's statement said that the decision to close the two businesses would not have a material impact on the company's 2023 financial outlook, the news is unlikely to help the company's share price which at the time of writing sat at $4.17 per share, down more than 50% from its $8.33 list price.

The company is due to release a report on its Q2 activities later this week.