Watch: Real estate downturn boon for online property platforms: Amit Agarwal, NoBroker
Nobroker Technologies Solutions, the Bengaluru based startup that operates a property rentals platform by the same name, raised a total of $101 million within four months this year from marquee investors such as Tiger Global Management and General Atlantic. That’s no small feat, given the ongoing consolidation in real estate markets, both offline and online.
Founded as a no-brokerage, rental property listing platform in 2013 by IIT Ahmedabad and IIT Bombay alumni Amit Kumar Agarwal, Akhil Gupta and Saurabh Garg, the startup has since expanded its horizons to create an integrated, end-to-end solution for real estate transactions including rentals and sale or purchase of properties. Its home store service provides value added services such as loans, packers and movers, legal documentation and online rent payments.
In a freewheeling conversation with TechCircle at its offices in south-east Bengaluru, CEO Agarwal said the platform has stayed true to its promise of eliminating unfair brokerage from the process of property transactions and saves over Rs 1,000 crore worth of brokerage per year.
Meanwhile, the larger online real estate market has been seeing an accelerated pace of consolidation. Several startups have folded to become part of larger players, while others have scaled down operations.
NoBroker has, over the years, learned that the future doesn’t lie in mere listings. It has strictly followed a customer-to-customer business, focusing on a sustainable revenue model that charges customers upfront, and has taken a very frugal approach to growth.
“Why has it been 19 years and we still not have a pure-play property listings unicorn is primarily because companies in the past have taken an approach similar to ecommerce. They felt that adding more cities and spending more on advertisements would fetch them a higher market share. But, this is not that type of an industry. It’s a non-standard product, and therefore, the task is much tougher here,” Agarwal said.
Agarwal also predicts that the online real estate segment will witness the emergence of at least one unicorn in the next one year. Startups that are valued privately at $1 billion or more are commonly referred to as unicorns.
He said the current slump in the offline property market has benefited NoBroker and other online real estate businesses because rentals remain the bedrock of this sector and continues to grow even in adverse market conditions. Besides, sales have grown since the demonetisation exercise a few years ago and the introduction of GST. Ever since the slowdown kicked in following the policy decisions, customers have been looking for ready-to-move-in properties rather than take a construction risk.
Flush with fresh funds, NoBroker is also exploring inorganic growth opportunities. Agarwal said the company is in the process of evaluating potential acquisition targets, and is closing in on two deals.