hipages Group debuts on the ASX, raises A$100.4 million via IPO

  • November 13, 2020 01:51 PM AEDT
  • Hina Chowdhary
    Director, Equities Research Hina Chowdhary
    1706 Posts

    Hina Chowdhary is the Director, Equity Research at Kalkine and has an extensive experience of about 15 years in the area of Research, which includes 5+ years in Equities Research particularly.She has earned a Master of Science degree from the renowne...

hipages Group debuts on the ASX, raises A$100.4 million via IPO

Summary

  • SaaS provider hipages Group made its ASX debut on 12 November after raising over A$100 million through an IPO.
  • The IPO received massive demand from retail and institutional investors in Australia and New Zealand.
  • Funds raised through the IPO would support hipages to drive future growth, expand into new channels and explore further opportunities.
Gold MTF non-AMP

Sydney-headquartered hipages Group Holdings Ltd (ASX:HPG) made its ASX debut on 12 November 2020 and started trading after successfully raising A$100.4 million via an initial public offering (IPO). The shares were issued at A$2.45.

hipages Group is a leading Australian-based online platform and SaaS provider that links tradies with residential and commercial consumers to resolve challenges pertaining to organising and coordinating home improvement jobs.

The IPO received huge demand from various institutional and retail investors across Australia and New Zealand. News Corp Australia is the largest shareholder in HPG with a 25.7% stake.

As part of the IPO, hipages Group raised A$40 million through the issue of new shares while the rest was raised through a secondary offer. The funds would be used to drive future growth through investment in the Company’s brand and technology platform. Further, the funds will support the Company’s expansion into different channels and further prospects.

Why did hipages go for an IPO?

Through the IPO, hipages Group intends to provide financial stability to fund its future growth by investing in its brand and technology platform, look for organic growth prospects to deliver strategic objectives and explore inorganic growth opportunities through the M&A route. The Company also aims to repay the current indebtedness.

How does the business generate revenue?

hipages generates revenue from tradies signing up to subscription packages and via contracted partnerships. During November 2019, the Company launched an improved subscription product and shifted to a subscription-only product offering for new tradies on the platform. Now its legacy listing or directory products are available to clients who joined hipages before November 2019.

77% of tradies, as on 30 June 2020, were on a subscription package.

What are the key costs involved in generating revenue?

The major costs include the expenditure related to sales, marketing, technology development, and operations and administration. Employee-related expenditures are the biggest individual costs and are allotted throughout these expense types by function.

What are the services hipages provide?

For tradies, hipages is a lead generation platform and technology-enabled marketplace that lets them search and quote for openings. The Company matches tradies with customers in local regions depending on various factors and data points, like location and job category using its a proprietary algorithm. While joining the platform, traders can set up an online profile that provides them with new ways to attract prospective clients. They can also display images of their work, feature distinctive attributes of their business, plus display their credentials, along with recommendations & ratings.

For consumers, the Company offer ways to link with qualifies tradies as per the expertise, availability, and location. The consumers receive up to three connections with tradies. They can communicate with these tradies, compare price quotations, and rate their profiles all through the platform. Besides, the customers can request for more tradie connections in case they require them. The platform also provides a centralised location to communicate tradies, to plan and organise jobs, and to make payments.

hipages also has a complete tradie on-boarding procedure which validates tradies for appropriate permits and ABN registration.

Stock Information: HPG shares were trading at A$2.460 (at AEDT 1:46 PM), in line with the previous close.

 

 


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