With a continued rise in the use of sharing economies, online tradie marketplace operator hipages (ASX: HPG) is set to diversify its portfolio by taking a strategic stake in tech company Bricks + Agent in a move that will secure access to more than 21,000 tradies.
By securing a 25% stake in Brick + Agent, which remains privately owned, hipages anticipates substantially increased exposure to work opportunities for users of both platforms. In doing so, hipages gains instant access to the $21b Australian residential and commercial property management market.
Founded in 2016 by Rafael Niesten and Jon Stu, Bricks + Agent has 360k users, a pipeline of almost 500k properties under management, and 21k tradies on its platform. Core to its popularity amongst those users, is its integrations with leading Australian property management software providers which include MRI, Property Tree, PropertyMe, and a blue-chip client base of property management agencies. Using the platform, property managers have a streamlined interface to manage the property maintenance process.
“I have followed Bricks + Agent’s progress for several years and have been really impressed to see Rafael, Jon, and their team develop a market-leading technology solution that makes life easier for their customers by taking the headache out of property management,” said hipages Group CEO, Roby Sharon-Zipser.
“Bricks + Agent is a great cultural match for hipages and fits perfectly with our strategy to expand into adjacent markets, and the $21bn property management TAM is a huge opportunity for us. Having founded hipages 17 years ago and have learned my fair share of lessons”
The 25% stake in Bricks + Agent has been secured for $6.25m and will be funded from hipages’ existing cash reserves. As part of the strategic stake, hipages CFO and COO Melissa Fahey will join the Bricks + Agent’s board.
“We’ve reached a point where the time is right to accelerate our growth plans to capture the huge opportunity we have ahead of us,” said Bricks + Agent CEO, Rafael Niesten.
“To be able to leverage the scale and expertise of a founder-led company like hipages which has an entrepreneurial culture like ours is amazing, and we’re really looking forward to working with Roby and the hipages team to continue to change the game in property management.”
Disclosed financials around Bricks + Agent were limited but hipages anticipates the strategic stake to be earnings accretive in FY22 while also flagging plans to leverage cross-selling and lead generating opportunities from the Bricks + Agent database.
As Australia’s largest online tradie marketplace operator, hipages reported $55.8m in revenue for FY21 which represented a 19% increase on the previous year. Pro-forma NPAT was up to $1.2m after a 4.2m loss the previous year.
Since listing on the ASX in November 2020 after a successful IPO that raised $100m at $2.45 per share, all key hipages metrics have continued to rise steadily as more tradies utilise the sharing economy marketplace.
HPG shares responded well to news of the strategic stake in Bricks + Agent, reaching $3.94 in morning trade, a 5% increase on their previous $3.75 close.
Alfred Chan is an Analyst at Emerald Financial, specialising in ASX-listed small cap companies.
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