Info-tech

Snapdeal close to snapping up Housing.com

Priyanka Pani Rajesh Kurup Mumbai | Updated on January 20, 2018 Published on May 03, 2016

Kunal Bahl, co-founder and CEO of Snapdeal

Common investor SoftBank facilitates $50-100-m deal



Leading online marketplace Snapdeal is in the final stages of acquiring online real-estate firm Housing.com.

According to sources and investment bankers, the talks for the deal were on since December and the deal could be finalised for $50-100 million.

SoftBank, a common investor in both the companies and the largest investor in Housing.com, is understood to have facilitated the deal. Nexus Venture Partners has also invested in both Snapdeal and Housing.com. Snapdeal’s founders Kunal Bahl and Rohit Bansal are also angel investors in the digital real-estate firm. Bahl had met the Housing board earlier this year, said a source aware of the development.

However, it is not clear whether Snapdeal will completely acquire the Mumbai-based portal or pick up a majority stake in it and let it run independently. Market watchers say that Snapdeal’s acquisition of Housing looks logical given the fact that the former has a huge data base which can be leveraged to run Housing’s business.

It will also help the Housing compete with new entrants such as Quikr and Olx. So far the online real-estate business is dominated by players like 99acres and Magicbricks.com.

Snapdeal had entered the property segment in a tie-up with Tata Housing in 2014. It is strengthening this segment to differentiate itself from other e-commerce marketplaces like Amazon and Flipkart. It recently partnered with property consultant JLL India’s Residential Services division that will help market residential real estate for the company.

Snapdeal and SoftBank declined to comment on the development. A spokesperson for Housing.com denied that there were any talks for sale with Snapdeal. “The company is performing very well and we are steadily moving towards becoming the most trusted platform to buy and sell homes in India. We are not in any talks with Snapdeal for a sale,” the spokesperson said.

Housing spats

Housing.com, started in 2012 to solve the problem of house search, has courted controversies in the past 12-18 months.

Starting with its founder Rahul Yadav’s public spat with Sequioa Capital (not an investor in Housing.com), to his “unprofessional” behaviour with SoftBank officials and finally his exit from the company. While most of the founding team has left the company, it has managed to make some recent top level hiring to keep the company afloat. The company has also not raised any fresh funds since SoftBank pumped in $90 million in November 2014. That apart, a slump in the real-estate market in the residential segment has hit most of the online realty companies.

While Housing is still struggling with its revenue model, it has managed to optimise cost by bringing down its cash burn. According to one estimate, the online player may have brought down the cash burn from $5 million per month last year to $3 million per month in the last few months. The company has closed all its rental and commercial listings and is focusing on home-buying and selling.

Published on May 03, 2016
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