The REA Group Limited (ASX: REA) share price is treading slightly lower during mid-morning trade. This comes after the property listings business announced it has invested in software provider, Simpology.
At the time of writing, REA shares are down 0.35% to $166.12. In comparison, the S&P/ASX 200 Index(ASX: XJO) is up 0.7% to 7,362 points.
REA accelerates financial services strategy
Investors appear unfazed by the company's latest update to the ASX, sending REA shares into negative territory.
According to this morning's release, REA advised it has acquired a 34% interest in Simpology for $15 million.
Founded in 2007, Simpology is a mortgage application and e-lodgement solutions business focused on enhancing the loan application process. The fintech company uses its Loanapp application tool to connect brokers and lenders in real-time for submitting home-loan applications seamlessly.
This further strengthens the REA's financial services strategy following its proposed takeover of Mortgage Choice in March.
The Simpology transaction will be funded by REA tapping into its existing cash reserves. In addition, REA will hold two seats on Simpology's board.
REA Group CEO, Owen Wilson commented:
REA's investment in Simpology reinforces our commitment to delivering the best end-to-end mortgage application solution for consumers, our brokers and their clients.
Simpology has deep integrations into over 30 lenders and over 12,000 brokers. Our partnership will provide a step-change in the loan selection and digital application experience that REA can deliver to the 12 million Australians who visit realestate.com.au each month.
About the REA share price
Over the last 12 months, REA shares have surged higher, reflecting gains of more than 60% for shareholders. The company's share price is within sights of breaking its all-time high of $169.92 reached last week.
On valuation grounds, REA commands a market capitalisation of roughly $21.85 billion, with approximately 132 million shares on its registry.
