NoBroker claims its top revenue source is subscription services
Bengaluru: Even as some real estate platforms such as Housing have closed their rental businesses, NoBroker Technologies Solutions Pvt. Ltd is gradually building a strong brand among flat owners and tenants by offering personalised services to both.
NoBroker started offering subscription services earlier this year for both tenants and home owners. Under the company’s so-called freemium model, customers can use the site to view up to nine contacts of owners for free. If they want more though, the company offers three paid services, for Rs999, Rs1,999 and Rs5,999, respectively. Under the last one, the company guarantees that tenants will find a house or returns their money. It offers two services to flat owners that cost Rs2,999 and Rs5,999, respectively.
Services include taking calls on behalf of tenants and flat owners, rent negations and others.
NoBroker chief executive officer Amit Agarwal said the subscription service has become the company’s biggest revenue source. Agarwal declined to disclose exactly how many subscription plans the firm sells, but said “thousands” of the 100,000 new customers that sign up every month pay for the services.
The company generates revenue in two other ways: by attracting advertisements from furniture start-ups (it claims 2.5 million user visits per month), and by offering services such as connecting tenants with movers and packers and drafting rental agreements.
“Our main focus is to monetise and keep up the level of customer experience. We’ve been surprised at the reception for our subscription service. The word of mouth about this has worked well and now we’re seeing thousands of customers sign up every month. We will soon launch a similar service for customers looking to buy and sell homes,” Agarwal said.
NoBroker’s attempts at charging Internet users and to generate revenues are one of the litmus tests of the built-for-India business model that only a handful of start-ups are said to follow.
During the funding glut of 2014 and 2015 start-ups in food ordering, grocery ordering and hyperlocal logistics which copied business models from similar companies in the US and China attracted a majority of early- and mid-stage capital. Most of them have either failed or are struggling, prompting investors to seek built-for-India start-up ideas rather than copycats.
To be sure, firms like Grabhouse, which raised $13 million in funding from venture capital firms Sequoia Capital and Kalaari Capital, also claim to offer broker-free listings, and operate on a freemium model, but Grabhouse has been struggling to scale its business amid increasing competition and is looking for a buyer, according to a 12 September Mint report.
NoBroker started out in 2013 to provide people a way to find homes without having to go to middle-men, or brokers, who sometimes charge as much as two months’ rent, for connecting house owners with prospective tenants.
In effect, NoBroker, which has raised roughly $13 million from SAIF Partners, Beenext and others, wants to displace the traditional broker the way organised retailers aim to take away business from mom-and-pop stores. In September 2015, more than 40 local brokers and hooligans descended upon the start-ups office premises, issuing threats to employees and beating up some of them. The experience galvanised NoBroker’s employees who became even more committed to making its business work, according to Agarwal.
NoBroker, which operates in Bengaluru, Mumbai, Pune and Chennai, will launch in a handful of new cities including Delhi, Noida, Gurgaon, Ahmedabad and Hyderabad over the next one year, Agarwal said. In early 2015, fresh from raising $3 million, the company had chalked up an ambitious expansive plan under which it wanted to expand to 20 cities. However, as the funding market turned, NoBroker has tried building a self-sustaining business over the past year.
“We will also launch in new cities but we want to first focus on ensuring that the experience for our existing customers remains excellent. We want to keep adding new properties, new customers and ensure that NoBroker is the first place someone comes in the rental business,” Agarwal said.