Patrick Grove’s Frontier Digital Ventures raises A$100 mil, makes 3 emerging market acquisitions

• Acquires marketplaces in Columbia, Tunisia & Morocco for A$56mil
• Leverage experience building iProperty, replicate in emerging markets

Australian Securities Exchange (ASX) listed Frontier Digital Ventures (FDV) has today announced the successful completion of the institutional component of a A$100 million (RM300 million) capital raising to fund three acquisitions from Norwegian based global online classifieds specialist Adevinta ASA which like FDV, operates digital marketplaces.

But while FDV specialises in building and operating leading property and automotive marketplaces in emerging markets globally, Adevinta operates in Europe mainly and with operations in South America in Brazil, Colombia and Chile and in North Africa in Moroccos and Tunisia.

But executing a strategy to optimise its portfolio, Adevinta is now divesting its North Africa interests and from Colombia, entering into agreements to sell 100% interests in Fincaraíz, the leading real estate marketplace in Colombia, Avito, the leading general classifieds portal in Morocco, and Tayara, the leading general classifieds portal in Tunisia, to FDV.

According to its announcement made to the ASX, the capital raising by FDV consists of a non-underwritten Institutional Placement of up to A$63.4 million (Placement) and non-underwritten 1 for 9 Pro-Rata Accelerated Non-Renounceable Entitlement Offer of up to A$36.6 million (Entitlement Offer) to raise up to A$100 million.

A$56 million will go towards the acquisition of Fincaraíz, Avito and Tayara while A$44 million will go towards further growth capital, balance sheet flexibility and payment of transaction costs.

The iProperty influence on Frontier Digital Ventures

FDV, founded and headquartered in Kuala Lumpur since 2014, saw its valuation increase from around RM150 million on its IPO in August 2016, to over RM1.5 billion this morning, an increase of 10x in 4 years, making it one of the most valuable tech companies in Malaysia.

FDV was founded by Patrick Grove (pic) and Shaun Di Gregorio after they sold iProperty to Australian listed company, REA Group in Nov 2015 in one of Southeast Asia’s largest startup exits.

Grove had acquired a Malaysian property portal from a husband-wife team in mid-2007 and renamed it iProperty. The site grew from being worth RM60 million when Di Gregorio first joined in 2009 as group CEO to being worth over RM2.25 billion when it was sold to REA Group.

“We learnt how to build iProperty in Malaysia and how big a property marketplace could be if you did certain things correctly. We also realised that great entrepreneurs in emerging markets neither had access to capital and mentorship nor the case studies we had. After leaving iProperty, we designed FDV to provide both financing and mentorship to these great local entrepreneurs,” explains Grove.

As CEO of FDV, Di Gregorio aims to leverage the experience building iProperty  and replicate it in emerging markets around the world.

“It has been great to build a global business from Malaysia, with primarily Malaysian leadership. In many instances, we were one of the first internet investors in some of these markets, such as Pakistan and Myanmar. These latest acquisitions see FDV evolve into becoming a leading operator of emerging market marketplaces.”

Following the new acquisitions, FDV’s portfolio will consist of interests in 15 online marketplace businesses active in 20 markets across Latin America, Africa and developing Asia which it describes as being entire Asia minus its five developed economies of Japan, South Korea, Taiwan, Hong Kong, Singapore plus China.