Frontier Markets: A Portfolio Approach

Mathew Care - SB Pty Ltd

Who?

Why?• Online real estate marketing spend will be > USD

$10M in our markets (growing >10% annually):- Cambodia $5M- Papua New Guinea $4M - Fiji $1.2M

Australia was once a frontier market:REA market cap now AUD $6.43 billion

• Plus:

Overview

1. Beliefs, aims & market identification

2. Our Approach

3. Case Study

4. Future plans

Beliefs

Beliefs

Online 50%

Offline 50%

Total Marketing Spend Online Marketing Spend

Rest of Market 20%

Market Leader 80%

Aims• Virtually all developed and most developing markets,

already have market leaders in relevant verticals

• Frontier markets with <10% internet penetration are yet to develop strong online classifieds leaders - presenting an opportunity

Our aim is to build a range of market leading online classifieds business in frontier markets

Market IdentificationNo entrenched market leader in relevant vertical

Ability to secure highly skilled local / expat talent to drive in-country execution

Ability to apply world class technology

Optional: Complimentary to existing presence (PNG/Fiji)

Optional: Purchase (majority or minority) of existing business which is / we believe can be the market leader

Our Approach

Our Approach1. Talented, equity incentivised, in-country Directors

2. International standard technology

3. Hub and spoke - core business services delivered centrally (tech, marketing, product etc.)

4. Rapid iteration based on learnings made in the markets that we operate

Directors

• PNG: Brian Byer, Aus expat 11yrs, started tech biz in PNG

• Fiji: Traviss Orr, Aus expat 4 yrs Fiji, started marketing biz in Fiji

• Cambodia:

- Chenda Moek: Cambodian National, founded biz 5 yrs ago, works in real estate industry

- Tom O’Sullivan: Aus expat 3 yrs, run an NGO in Cambodia and mutliple biz in Australia

Technology - real estate• Centralised platform that allows new features and products to be easily

pushed to each market

• Strong agent integration to ensure high quality listings

• Mobile responsive / adaptive - our markets are 50% - 60% mobile

• Listing management (sold, rented etc.) - focus on building data set, huge demand in our markets from agents for data and willingness to share

• Lead reporting - Reinforcing value proposition

• Email database focus - Alerts, pop-ups, plus segmentation e.g. PNG first home buyers

• Dual language (Cambodia)

Hub & spoke• Aim is to allow in-country management to focus on

customer acquisition, sales and account management - agents & advertisers

• Identify expertise that can be delivered remotely and build a strong specialist team to deliver

• Geo-arbitrage on both a cost and skills basis i.e. Source labour in the geography where it can be most effectively and efficiently delivered

• Centralised IP allows crossover of market learnings

Hub & Spoke - Mgt Team

• Mathew Care - Director SB

• Originally a lawyer, number of real estate related and pure online businesses

• Manages central service delivery to market Directors

• Legal support for M & A, structuring

• James Rodda - Director SB

• Senior Analyst at Platinum Asset Mgt (Australia’s largest offshore funds manager USD25b FUM)

• Covers Asian technology companies & applies learnings to SB

Strategy & Management Strategy

Australia Philippines

Hub & Spoke - Core Services

• Marketing: SEM, SEO, social media advertising and content marketing

• Project delivery new websites

• Product design

• Accounting, Legal, HR

• Customer enquiries, business system creation, social media posting, market research, manual listing upload

• Graphic design, banners, animation, infographics

• Email marketing

Indonesia

• Technology delivery

• Coding & QA

• Local language Social & SEM - Aus oversight, content writers

Relevant Market

Hub & Spoke - Local Team

• Listings: Agent & developer relationships & account management

• Revenue:

3rd party revenue

Mortgage revenue (Fiji)

Agent / developer sales teams

Hub & spoke - Mgt & Culture• Centralised IP (Google Drive)

• Focus on systems for scalability & rapid iteration: documents, flow charts, videos

• Daily reports, weekly team meetings

• Time investment to build culture: photos, children, spouses, birthdays, favourite quotes

• Investment in physically visiting team members regularly - e.g. this conference

Case Study

Future Plans

Future plans• Develop existing positions in PNG & Fiji, focus:

listing quality & revenue

• Solidify position in Cambodia, focus: Listing volume & quality, leads, revenue - 3rd party

• Consider expansion to new & related markets (real estate and horizontal), via startup, partnership or acquisition

Questions?

Beliefs• Leading online

classifieds businesses create a ‘network effect / virtuous circle’

• Creating a high and sustainable barrier to entry resulting in significant value creation