Real Estate Investar (AX:REV) floated on the ASX on 10 December 2015, raising A$5m (25m shares at A$0.20 per share) to fund market growth and product development. REV offers integrated online software tools for real estate investors in Australia and New Zealand (NZ) on a software-as-a-service (SaaS) basis. REV’s unique product, underpinned by strong relationships with strategic partners, has a membership base of ~155,000 (January 2016). Of this, ~2,700 are paying subscribers, which is 0.15% of all investment property owners in Australia and NZ and 0.4% of owners with more than one investment property. Further market share gains, an increase in conversion of members into subscribers and adding new high-margin products could provide material upside to the current share price.
A unique product for property investors
Other free products available to property investors tend to meet individual property needs and be standalone. REV has a complete end-to-end suite of online services that help investors with identifying, analysing, tracking and accounting for residential properties in Australia and NZ. It also has a partnership with accounting software giant Xero (AX:XRO), which opens up market expansion opportunities. REV intends to build international versions of its proprietary software for foreign investors of the Australian and NZ residential property market. We expect it to leverage its mortgage broking licence in transactional services from FY17.