LatAm Autos, an Australian founded online auto classifieds startup operating in Latin America, today announced the opening of its Initial Public Offering (IPO), ahead of its listing on the Australian Securities Exchange (ASX) to raise AUD$18 million. The startup is following in the footsteps of other online classifieds companies such as SEEK, REA and Carsales that have experienced enormous success as publicly listed companies.
Founded by two Australian entrepreneurs Timothy Handley and Gareth Bannan, LatAm Autos is focused on emerging markets in Latin America – namely, Argentina, Mexico, Ecuador, Peru, Panama and Bolivia – where internet penetration, car ownership and online advertising are all expected to see massive growth in the next few years.
In fact, according to the prospectus lodged on December 10th, total new and used passenger cars in Latin America have been growing at 7.5 percent compound annual growth rate since 2000. Aggregate sales of new passenger cars in Latin America is three times greater than Australia’s; and online advertising annual growth is between 26 percent and 45 percent in Argentina, Mexico and Peru.
This trend is expected to continue, with online advertising expenditure across Argentina, Ecuador, Mexico and Peru estimated to grow at 22 percent in the coming years to 2018.
LatAm Autos CEO Jorge Mejia Ribadeneira said: “With a combined population of 222 million people and an annual automotive advertising spend of AUD$695 million, LatAm Autos is well positioned to capture a significant share of the dedicated online auto classifieds market in Latin America.”
The startup has a multifarious business model, generating revenue from three primary sources: 1) subscription services, advertising and lead generation for car dealers; 2) private listings; and 2) general advertising.
LatAm Autos also has strong team behind it, with board members including AFL Chairman Michael Fitzpatrick, founding investor in Freelancer.com Simon Clausen and the Chairman of the BHP Billiton Community Trust Colin Galbraith, who have all invested in the company.
LatAm Autos is offering 60 million shares to be listed on the Australian Securities Exchange (ASX) at an offer price of $0.30 a share. But the offer is an Institutional Offer and Broker Firm Offer meaning it is only available to institutions and other investors through a participating broker.
Upon completion of the offer and the Demotores Agreement, LatAm Autos will acquire five Latin American online auto classifieds businesses including: Seminuevos.com and demotores.com.mx, which together are the most visited, dedicated auto classifieds websites in Mexico; Autofoco.com, a top 3 dedicated auto classified website in Argentina; Patiotuerca.com, which includes the most visited dedicated auto classifieds websites in Ecuador, Panama and Bolivia; and Todoautos.pe, the most visited dedicated automotive content website in Peru.
Co-Founder and Executive Chairman, Handley, said: “The ASX is an ideal platform to support an international business like LatAm Autos and provides an opportunity for investors to participate in this global investment opportunity. We are fortunate to have attracted an exceptional and highly qualified Board and have been very pleased with the response to our Institutional Offer.”
“We are pleased to invite investors to join LatAm Autos as the company embarks on an exciting phase of its development in an aim to become the dominant Latin American online auto classifieds company.”
It should be noted that the company has had declining revenue from 2012. In the year 2012, the company generated over $7 million; and in the following year, that number slipped slightly to $6.5 million. From July to December this year, the company has delivered a turnover of $2.9 million. However, the company states that this is not indicative of business performance and is influenced by various economic factors in Latin America.
Upon completion of offer Fitzpatrick will own 14.2 percent of the company, followed by Handley will own 11.7 percent, then Clausen (8.2 percent), Ribadeneira (4.8 percent) and Galbraith (0.3 percent).