The company’s mission is to become the world’s leading operator of online marketplaces in emerging markets. It aims to increase traditional advertising revenue with transaction-based revenue, which underpins long-term growth.
Frontier Digital Ventures Ltd (ASX: FDV) is pursuing a legal restructuring of its operating companies into three distinct geographic groups in order to enhance growth opportunities and support the business to its full potential.
The restructuring is expected to improve operational efficiency, increase opportunities for organic and inorganic growth, improve management culture and accountability, foster greater knowledge sharing and innovation and strengthen its regional presence, as well as increase options monetization over time.
The legal restructuring is subject to ongoing legal, accounting and tax advice, and more details will be released in due course.
The company’s mission is to become the world’s leading operator of online marketplaces in emerging markets.
It aims to increase traditional advertising revenue with transaction-based revenue, which underpins long-term growth.
Proven business model
The company is focused on opening significant new income opportunities closer to the real estate, auto and general classifieds transaction.
The FDV group is now approaching cash flow balance, with a solid balance sheet proving significant funding flexibility.
In addition, its equity-aligned board and management support the focus on long-term shareholder value.
In less than a year of ownership by FDV, FincaraÃz, Avito, Tayara and Yapo facilitate all transactions and significantly improve financial performance.
FincaraÃz facilitates real estate transactions, concluding 25 transactions since the start of the year, with significant momentum and a pipeline of 100 real estate projects.
Avito has launched real estate and automobile transactions as well as the development of joint products with Motor, the first marketplace for new cars in Morocco.
Yapo continues to exceed expectations, closing its first real estate transaction in October 2021.
Although at an early stage, these acquisitions follow in all traces of the transaction model of Zameen and InfoCasas, two of FDV’s fastest growing operating companies.
New structure of the FDV group
Frontier Digital is restructuring its companies into three distinct geographic groups:
â¢ FDV LATAM (Latin America);
â¢ FDV Asia; and
â¢ FDV MENA (Middle East and North Africa).
Highly strategic footprint of FDV LATAM
FDV LATAM has a highly strategic footprint in 12 key markets, with strong real estate revenues.
The successful execution of the transaction model by its subsidiary InfoCasas provides a model for other operating companies across the region.
Frontier Digital owns 100% of InfoCasas, FincaraÃz, the main real estate portal in Colombia, and Yapo, the main general classifieds portal in Chile, which facilitates better control and economic benefits.
In addition, the language common to all markets offers opportunities for greater collaboration.
In the third quarter, it recorded annualized revenue of $ 38 million and positive EBITDA at the portfolio level.
The restructuring increases monetization opportunities, which include liquidity events involving US-based companies / investors and even the possible NASDAQ listing of FDV LATAM, among others.
In Asia, it is the leader in four dynamic markets: Myanmar, Pakistan, Philippines and Sri Lanka, with Hoppler being the main portal for real estate transactions in Manila.
It has both real estate and auto portals in Pakistan, the Philippines and Myanmar.
In the third quarter of 2021, it recorded annualized revenue of $ 22 million and positive EBITDA at the portfolio level.
The Pakistani market is well understood by European investors, offering potential future avenues for liquidity.
Frontier Digital also noted strong overall M&A activity in Asia.
It is the leader in the four markets in Morocco, Tunisia, Nigeria and Ghana, with two very complementary activities in Morocco in the real estate, automotive and general sectors.
Its teams, 100% owned by Avito, number one in generalist classifieds in Morocco, and Engine teams co-locate, creating greater collaboration and shared learning between companies.
Real estate transaction trials have been launched for Avito and Tayara, one of the leading general classifieds platforms in Tunisia, and both have successfully closed deals in 2021, with a number of new housing projects in the pipeline.
In the third quarter of 2021, it recorded annualized revenue of $ 9 million with a significant improvement in EBITDA.
Avito, announced its first positive month of EBITDA under the ownership of Frontier Digital.
While the monetization pathways may be less advanced compared to other regions, the company stressed that businesses need time to successfully implement the transaction model.
Increased monetization options
FDV Founder and CEO Shaun Di Gregorio said, âWe are delighted to announce the planned restructuring and to release an updated presentation for investors, which shows that FDV’s excellent performance continued into Q3 2021. .
âThe restructuring is expected to improve operational efficiency, increase opportunities for organic and inorganic growth, improve management culture and accountability, foster greater knowledge sharing and innovation, and strengthen FDV’s regional presence.
âAdditionally, the restructuring is expected to lead to an increase in monetization options over time.
âWe remain focused on strengthening our market leadership positions with high growth transaction revenues, in line with FDV’s strategy of creating long-term shareholder value. “
A solid track record
Founder and CEO Di Gregorio is one of the world’s leading leaders in the online marketplace with a solid track record of creating long-term value.
Former CEO of iPropertyGroup, he led the transformation of iProperty Group from a small US $ 15 million online business with a market capitalization of US $ 600 million.
As the Managing Director of the Australian group REA’s core business and one of its global leaders, he grew the business alongside a team, with revenues of AU $ 5 million in a company with more than 300 employees and a turnover of over A $ 150 million.
Proactive webinar presentation
Di Gregorio will present the company’s investment proposal during the Proactive Online Markets webinar next Tuesday starting at noon Sydney time.
To register for the webinar, Click here.