Bengaluru based peer-to-peer, broker-free listing portal for home rentals, NoBroker plans to use the latest Rs 50 crore raised from South Korean investment firm, KTB Ventures, to expand its service in North India, co-founder, Amit Agarwal told BloombergQuint.
“The objective is to use this fund and expand the services to top six cities, including three cities in North, namely Delhi, Noida and Gurgaon, in the next couple of months,” Agarwal added. He stopped short of naming the other cities, saying a final decision will be taken only early next year.
The investment was an extension of the earlier Rs 65 crore raised through Series B funding in February 2016. Existing investors like SAIF Partners, BEENEXT and Digital Garage had pitched in with the money then.
NoBroker has raised Rs 140 crore so far, said Agarwal. The startup is also backed by Snapdeal's former product head Anand Chandrasekaran and Paytm founder, Vijay Shekhar Sharma.
Driven by their personal experience of renting houses through brokers, three Indian Institute of Technology alumni Akhil Gupta, Amit Agarwal and Saurabh Garg founded the property listing platform in 2013 and subsequently launched the site in 2014.
The company has 15 lakh existing customers on the platform, and 1 lakh new customers get registered every month, across the four cities it currently operates in, namely - Bengaluru, Mumbai, Chennai, and Pune. Agarwal claims the website collectively saves more than Rs 20 crore in brokerage fee, every month.
“A typical rental transaction would cost two months' brokerage and a resale transaction used to cost buyers and sellers a combined 4-6 percent of the deal value as brokerage. NoBroker has managed to crash this transaction cost and put the savings back in customer's pocket,” he explained.
Customers can contact up to nine landlords for free and beyond that the company charges between Rs 999 to Rs 5,999 based on different plans, including assigning a relationship manager.
Agarwal said NoBroker has cracked the revenue model and has proved that is possible to charge for providing information in the property rental space, a model which has been successful in the matrimony space
Spending money is not everything, if you are solving a customer problem it doesn't matter how big or small you are, and that is why we are growing so fast. Two years back, we were nobody.Amit Agarwal, Co-founder, NoBroker
The firm has listed 5 lakh properties so far and achieved a run-rate of 5,000 transactions every month.
Competition
Rival broker-free rental portals have attracted investor interest in the recent past, including NestAway, Zocalo and Grabhouse.com, which last month got acquired by Quikr.
In April, NestAway raised around Rs 200 crore in Series C funding led by American investment firm Tiger Global, Yuri Milner - founding partner of DST Global, and IDG Ventures India.
However, Agarwal maintains that NoBroker's model is unique and less operation intensive when compared to the business model followed by peers in the segment. NoBroker is aiming to be the market leader over the next two years.
The startup recently moved to a ‘freemium subscription-fee based model' (where one pays for the services, after a fixed number of free services) and has been growing revenues aggressively.
“This is the first time that customers are paying upfront platform-usage fees in real estate since they can clearly see 80-90 percent savings in their transaction cost,” he said, adding that there is a huge customer demand and acceptance of a brokerage-free real estate marketplace.
NoBroker estimates that the market size of residential rental and resale brokerage in just the top 20 cities in India is $6.5 billion, which is expected to grow to $17 billion over the next five years.
Agarwal added that he is hopeful that NoBroker will start making profit in the next nine months on a city by city basis.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
