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  • PropertyGuru Grows Into SmartLoans Space, Launches Mortgage Site for Home Buyers

    Jan
    07
    posted by Mohan Belani on Thursday, January 7, 2010 at 5:04pm Categories: Blog

    AcquireThe loans market has been heading upwards for the whole of 2009, with the volume of home loans in 2009 peaking way past the high levels last seen in 2007. This somewhat explains SmartLoan’s recent profitability announcement and how they managed to close $30 million worth of loans to date. With numbers like these, it is no surprise that other companies want a piece of the pie. Allproperty Media Pte Ltd, the parent company of PropertyGuru which is one of the leading property sites in Singapore, just did that by launching their own version of a loans site. LoanGuru allows potential home buyers to get the best mortgage rates for their homes.

    LoanGuru
    LoanGuru definitely made an excellent strategic move by venturing into the mortgage space, since clearly that’s the next valuable offering they can provide their home-buying users. From a usage and functionality perspective, it is exactly like SmartLoans in which it allows users to input certain variables pertaining to their home loans i.e. rate package, interest offset etc. The only difference of course is the way the details of the loans are shown to the user. LoanGuru also focuses on mortgages for now. In due time, I would believe that they will head towards the commercial properties loans as well, something SmartLoans is already doing.

    Allproperty Media Wanted to Acquire SmartLoans
    To understand the situation better, we spoke to Vinod Nair, Founder of SmartLoans, to get his views on this. He confirmed that SmartLoans and Allproperty Media were in discussions from July ‘09. He further added that both parties agreed that they added complementary value and that a partnership or acquisition would work to both their advantages. In all due fairness, I got in touch with Steve Melhuish, the Director and Co-founder of PropertyGuru, to get his views on the matter as well. Unfortunately, he refused to comment on speculation about mergers and acquisitions. However, he was quick to add that the decision to develop the LoanGuru business was made two months ago, after a detailed assessment of the mortgage market, while leveraging the experience of generating mortgage leads over the last 18 months.

    Well now that LoanGuru has been launched, it’s pretty obvious that the initial partnership/acquisition plans had fallen out. When asked why, Vinod said that they could not come to an agreement on the price and terms, which he personally felt was not within negotiable range. He also added that since SmartLoans was barely 4 months old at that point, he did not want to short sell himself or the company. Furthermore, the business model was starting to prove itself and that customers were giving them great feedback on the service they were providing. The initial success was a great validation to their unique approach in the mortgage industry. Vinod was unaware of the development of LoanGuru, until today.

    At the end of the email interview, Steve added that, “PropertyGuru has had (and continues to have) an ongoing friendly relationship with (and great deal of respect for) the founder of the SmartLoans business”. Vinod, on the other hand, ended the email with a bitter taste by mentioning that it was not cool that a lot of the ideas and concepts were lifted from SmartLoans. He does realize from a legal view that nothing wrong was done and me-too companies are part and parcel of the challenges entrepreneurs face. But it is ultimately the market’s choice to decide the winner and if there can be a place for both companies to co-exist.

    I guess the once boring loans-space just got a whole lot more interesting!


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