The Rent.com.au Ltd (ASX: RNT) share price is exploding today in dramatic fashion. Rent.com.au shares closed at 4.3 cents each last week (before the company was placed in a trading halt).
However, Rent.com.au opened this morning at 10 cents a share and have rocketed even higher since. At the time of writing, the Rent share price is trading at 12 cents a share, up a staggering 167%. It's the highest share price this company has touched since 2016.
So who is Rent.com.au? And why is it experiencing such a dramatic jump in value today?
Image source: Getty Images
Rent.com.au in a nutshell
Rent.com.au is an online provider of rental advertising for renters and landlords. It operates an online marketplace in a similar fashion to its far-larger rival REA Group Ltd's (ASX: REA) realestate.com.au website and Domain Holdings Australia Ltd (ASX: DHG)'s domain.com.au.
According to the company, Rent.com.au's mission is "to deliver excellent services for renters and all marketers of rental properties". Additionally, the company aims to "become the home for renters with the widest possible choice of homes in one convenient location".
Rent.com.au also offers several "exclusive and industry-first products and tools" as well. These include Renter Resume, RentBond, RentConnect, RentCheck, RentPay and RentReports, amongst others. These products and tools collectively serve to "simplify the renting process for renters, landlords, and agents".
The company has delivered some head-turning numbers of late. Just last week, Rent.com.au released a quarterly update. In this update, investors were informed that the company brought in $734,000 in revenue (remember, this is a small company). That was a 27% improvement year on year. Earnings before interest, tax, depreciation, and amortisation (EBITDA) also experienced a 55% improvement year on year.
However, the company's earnings are yet to break even.
Paying the Rent
So why are shares of this little-known company exploding today?
Well, it's probably the result of an ASX market release the company put out this morning before market open. In this announcement, Rent.com.au informed investors that Australian tech entrepreneur Bevan Slattery has made a substantial investment in the company.
Rent.com.au tells us that Mr Slattery has received 55 million newly issued ordinary shares as a result of his $2.75 million investment. These shares were placed at a price of 5 cents a share (meaning he has already almost tripled his money on today's share price gains). Rent.com.au stated that it intends to use this funding injection to provide "additional capital to accelerate RNT's transformation of the renting experience".
Rent.com.au CEO Greg Bader had this to say on the deal:
Bevan has a well-earned reputation for innovation and disruption across the technology sector and having Bevan come on board as a major shareholder is fantastic. I am excited that Bevan shares our vision for the platform and this additional investment will allow us to maximise the potential of our upcoming RentPay launch and provide additional working capital for marketing and product development.
Mr Slattery has more than 20 years' experience in founding and investing in early-stage technology companies. These include forays with NextDC Ltd (ASX: NXT) and Megaport Ltd (ASX: MP1).
The company's release also quoted Mr Slattery on his investment:
I love disruptive platforms that have the ability to scale and Rent.com.au has great potential to achieve that goal. I look forward to supporting the board and management team and am excited to be backing another innovative Australian technology platform.
Clearly, investors are more than on board with this vision, judging by the company's performance today.
