Bangalore: The global slowdown that began to hurt businesses in India in mid-October, did not deter Sudarshan Purohit and his friends Kailash Rathi and Ankur Agarwal, who drew up plans to launch a real-estate website despite signs that the sector would face tough days ahead.
“We have a long-term business model but yes, we knew we had to do something different to survive in the portal space. Buying and selling would drop substantially in the coming months and we had to think of different, personalized services that no one else really offers,” said Purohit, 22, who worked with Insilica Semiconductors India Pvt. Ltd after graduating from Indian Institute of Technology, Madras, before quitting it to start Relocateeasily.com.
Purohit, Rathi and Agarwal are part of a contrarian but growing trend. In the last six-eight months, even as property sales have all but vanished and few new projects are taking off, a number of start-up websites in the real estate space are exploring various allied services besides offering the conventional commercial services.
Long-term plans: (from left) Kailash Rathi, Sudarshan Purohit and Ankur Agarwal of Relocateeasily.com. Hemant Mishra / Mint
Earlier, property portals such as Consim Info Pvt. Ltd-run Indiaproperty.com, Makaan.com (promoted by People Interactive (I) Pvt. Ltd, which also promotes sites such as Shaadi.com and Fropper.com) and Info Edge Media Ltd’s 99acres.com started off primarily as platforms to buy, rent and sell through listings.
At Persquarefeet.in, a website launched late last year, founder Sheeba Manish is planning to add analytical information including consumer reviews and related news articles alongside an active, daily price index of properties. Elsewhere, iProperty.com (earlier Realacres.com) has matured from a real estate listings site to a networking platform with updates of realty events worldwide.
When Relocateeasily.com went live in March, it focused at both online and offline services for home buyers and residential and commercial tenants. For a tenant looking for a home, it helps in showing around properties, getting movers and packers and a cooking gas connection, shopping for a television, refrigerator and washing machine, and even a cable TV connection. The portal charges 20 days of rent as service charges, levying a fee on other services, said Purohit.
Suksh Technology Pvt. Ltd launched 100nests.com in April in a bid to help customers know their neighbourhood better when they move into a new place and conduct accurate valuations of properties.
“It’s an overcrowded space and so we decided to address specific demands after doing our own market survey,” said chief executive officer Shreyans Chopra, a former technology analyst with Goldman Sachs Group Inc., who set up his first portal My100floors.com in October.
The primary revenue option for the portals is advertising. Chopra’s 100nests.com has alternate revenue models for transactions for which it has tied up with ICICI Home Search and Glamsham.com. Typically, a website takes about 2-2.5 years to break even, but with advertisingrevenue being down, it may take more time, said most owners.
Most of these start-ups have angel investors as backers, who fund such early-stage companies primarily out of trust. But within a year of launch, each of them is looking at venture capital (VC) funding.
The founders of Relocateeasily.com, for instance, started with Rs15 lakh from friends. “By end-2009, we hope to raise about Rs3 crore from VC funds as we expand our services to six other cities besides Bangalore,” said Rathi, the portal’s chief financial officer.
Suksh Technology raised about Rs4.8 crore from a Kolkata-based angel investor Rajendra Bachawat and now hopes to raise Rs12-15 crore from VC funds within a year for marketing and expanding to other markets.
At iProperty.com, Smita Thorat, director and chief executive, says the firm is aiming to raise a second round of funding of at least Rs32 crore from VC funds. Its first round of funding came from investor IPGA Ltd. Thorat declined to name figures.
“Though they may get angel funding, getting VC funding would be a difficult task. VCs would demand tractions and data from such portals before they commit,” said Mohanjit Jolly, executive director of Draper Fisher Jurvetson India, a VC firm.