Earlier this month Bengaluru-based real estate platform NoBroker raised $51 million in a Series C funding round led by private equity giant General Atlantic. Existing investors SAIF Partners and BEENEXT also participated in the round. Founded in 2014 by IIT-alumni Akhil Gupta, Amit Kumar Agarwal and Saurabh Garg, the startup provides verified real estate listings for buying and renting properties online.
With over 25 lakh properties registered on its platform and more than 60 lakh customers having used their services, NoBroker is now looking to utilise the funding to ramp up its presence and enhance its tech capabilities to drive growth. In an interview with Fortune India, Amit Kumar Agarwal Agarwal, CEO and co-founder, NoBroker talks about building tech capabilities in machine learning (ML) and artificial intelligence (AI), helping homeowners make peace with bachelors, and the challenges of operating in a highly consumer-centric business. Edited excerpts:
What are you going to spend your $51 million fund raise on?
The objective of this fund raise is mainly to expand to multiple cities across India. We will use our marketing engine and word-of-mouth to become popular across the country and save brokerage for crores of Indians. We aim to provide convenience and act as one-stop shop for all real estate related needs, including packers and movers, and home loans. We will also aggressively invest to build our tech capabilities, especially in AI and ML driven solutions.
Till date, we have raised ₹500 crore [about $71 million] in funding. Our key investors are General Atlantic, SAIF Partners, BEENEXT and KTB [Korean investor]. Our cap table reflects confidence from Indian, U.S., South Korean and Japanese investors.
What do you mean by being a one-stop shop?
The problem of rental real estate market is still not fully solved. Our aim is not just to help in discovery, but also in negotiation, deal closure, legal documentation, packers and movers, house cleaning and maintenance. The disruption needs to happen across the value chain so that the customer feels no hassle and can smoothly close the entire transaction and movement. This is the next frontier that we are aiming to solve.
Renting a home in India has never been easy, more so if you’re single. Have you managed to crack this pain point, and how?
There is a misconception among many elder owners that bachelors are not good for their homes. This is mainly because they hear some rare stories and imagine the worst situation. When a physical broker is involved, the connection between owner and tenant is not direct and scope of confusion arises. On NoBroker platform, when owner and single tenants directly interact with each other, a huge amount of comfort gets built in the mind of owner. Owner gets to talk and meet with the single tenant directly. This has helped us close deals with bachelors very fast.
What has been the biggest challenge that you’ve had to overcome to achieve success?
As like every startup, we have had our share of up and downs. The down event was an attack at NoBroker office in Bengaluru. [In 2015, NoBroker office premises in the city were attacked by local brokers and unruly elements.] One day, we saw 80 brokers gathered at the entrance trying to break door and beat our employees. We had to call police. Unfortunately, later we had to vacate that office and move to a more secure building. But yes this made us believe that what we are doing is really causing a disruption.
Customers have loved our non-brokerage model from day one. Which ever city we launched, customers tried the service and made us popular through word-of-mouth. Another challenge that we faced was, when some of the venture capitalists (VCs) struggled to find the western model that we have copied from. We had to tell them that this business model is unique to India. We have not copied from anywhere and this is an innovative model for an India specific customer problem. There is no Uber/Amazon equivalent of NoBroker in the U.S.. Over time, once VCs saw the traction which NoBroker generated, they realised the innovation that we are doing as a startup.
Share with us your choices of the top rental residential markets in India and why?
In terms of rental appreciation and demand-supply gaps, typically Mumbai city has seen the most demand. Although this depends also on specific micro-markets in each city. For example, Koramangla and Indiranagar in Bengaluru always remain in high demand.