Sweden's Hemnet Plans IPO on Nasdaq Stockholm

April 8, 2021
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Top Swedish property portal Hemnet has today announced that it is planning a Q2 debut on the Stockholm Nasdaq with shares being offered to the general Swedish public as well as vetted institutional investors from overseas. The decision has been made after discussions between Hemnet's board and major stakeholders General Atlantic and Sprints Capital with the consensus being that an opportunity to own shares in the company may well increase engagement from consumers, business partners and employees.

If all goes as planned General Atlantic, Sprint and Hemnet's other long term institutional stakeholders will be able to sell shares in the company within months, with today's press release saying that priority allocation of shares may well be given to Hemnet employees and agency customers. Commenting on the news, General Atlantic's Managing Director Chris Caulkin said:

“Hemnet is one of a kind. General Atlantic seeks out disruptive high growth technology companies all over the world. Rarely - if ever - do we find brands and products that resonate with their customers as strongly as Hemnet. We are delighted to have supported management’s delivery of innovation and growth over the last four years, together with our partners at Sprints and Mäklarsamfundet.”

Hemnet already dominates the Swedish property marketing industry and its management believes that, by following the route to IPO taken by several other major property portals around the world, it can further entrench its position while gaining access to domestic and international capital. Hemnet has had steady EBITDA margins of between 37-38% over the last 3 years and is aiming for a medium-term margin of 40-45% after going public. As for revenue (expressed as 'Net sales'), the numbers released today show consistent year on year growth of between 17-22% over the last 3 years with revenue topping 544 million Swedish krona (around $63.5 million USD). Hemnet expects to be able to maintain these growth figures in the medium term as well.

Hemnet CEO Cecilia Beck-Friis said of her company's planned IPO:

“I am proud to announce our intention to list on Nasdaq Stockholm. Hemnet has developed into a ‘win-win’ value proposition for the entire housing market by creating the best possible experience and products for our visitors and business partners. This has led to a strong financial track record with an annual average sales growth of approximately 21 percent between 2018 and 2020, and a 21 percent CAGR of adjusted EBITDA during the same period. I look forward to continuing building on our strong foundation as the number one property platform in Sweden.”

The portal operates a business model along Australian lines whereby vendors themselves rather than agents pay the portal directly for listing packages, a situation which the portal believes gives it a significant advantage in the market as vendors are more motivated to invest in marketing to maximise the sale price.

Today's news comes on the back of several years of rumours around Hemnet and is perhaps little surprise given that many of Hemnet's international peers with local market dominance are either doing nicely on the public market or are considering a similar public debut. Last month saw news leaked that Southeast Asian property portal company PropertyGuru was weighing up its IPO options and there have long been rumours surrounding Spanish headquartered idealista which recently changed owners.

Although 2021's initially red-hot IPO market has cooled off somewhat over the last month or so, we can perhaps expect that Hemnet's will not be the only property portal public debut announcement this year.

April 8, 2021
Since March 2020 Edmund's job has been to read about, write about, collect data on, analyse and generally know about real estate marketplaces and the companies that run them. Before that he worked at the aggregator Mitula Group (which became Lifull Connect) for five years.

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