Quikr gets 50% revenue from acquired firms: CEO Pranay Chulet
Bengaluru: Online classifieds portal Quikr is now generating half of its revenue from companies it acquired, chief executive Pranay Chulet said in an interview.
Initially the revenue figure from acquired companies was only around 15-20% of its overall revenue, but the “scaled up versions” of the acquired entities now contribute around half of Quikr’s revenue, Chulet said.
As of December 2017, Quikr’s largest vertical was the homes category which accounted for 30% of the company’s total revenue. Its used cars and bikes segment accounted for 20% of the total revenue, the services segment (QuikrEasy) contributed 15%, while QuikrJobs contributed another 15%, Chulet said. The rest came from user transactions and goods sold via its online classifieds marketplace.
Under the homes segment, Quikr operates three acquired companies including real-estate portals Commonfloor and Realty Compass, and managed home rental platform GrabHouse. Quikr paid $120 million in an all-stock deal in early 2016 to acquire Commonfloor, which was its biggest acquisition till date.
Since 2016, Quikr has adopted a vertical strategy and moved from being a horizontal classifieds portal like Craigslist. This essentially required the company to identify key business segments based on user interest and build products on top of each segment. In September 2015, Quikr said that it will build vertical businesses around automobiles, real estate, jobs, services and customer-to-customer sales to grow its business. These five categories accounted for 90% of listings on Quikr at that time.
Quikr has been on an acquisition spree since 2015 and has acquired 13 companies in total till date across various categories. Recently it acquired two subsidiaries of HDFC focusing on real estate brokerage and property classifieds for Rs350 crore.
The company saw acquisitions as the best way to build its verticals, but acquisitions also meant that Quikr had to deal with job cuts and the resultant hits to its image after deals.
“Acquisitions get more limelight, and so they get talked about more; they have been great for us, and we will continue to look at that option. However, by no means have they been the only source of growth. In fact, there is always a trade-off in every acquisition. Acquisition will get you speed in terms of growth, but there is a lot of work that needs to be done to get these acquisitions to work. So it’s not a slam dunk every time for us,” Chulet said.
Mint had reported in March 2016, that at least 100 employees belonging to Commonfloor were laid off after the acquisition. The cuts were in departments like finance and small support roles like IT support, among others; employees from both Commonfloor and Quikr were given pink-slips post acquisition, an ex-Commonfloor executive said on condition of anonymity.
But as Quikr started expanding with acquisitions, the company had to keep up with competition from rivals like Olx and to some extent Facebook, which is also being used for buying and selling used goods. Additionally, Quikr had to drive strategies to bring back its existing users, and not just focus on acquiring new users.
Quikr invested heavily in data analytics and data sciences to bring back users, Chulet said, and that paid off. Using a strategy called cross-categorization, the company claims to bring back around 15-20% of its users and up to 75% of its customers in some segments depending on the nature of the business vertical.
“Since we are a multi-vertical platform, we can always find customers for one business within another business of our company…If you look at our job applicants on QuikrJobs, these are essentially people looking for new jobs and a good portion of them will end up moving to new cities. And so we figured that they could form good buyers for used bikes and vehicles as well as for home rentals,” Chulet explained.
According to data sourced from business information platform Tofler, Quikr reported total revenues of Rs63.8 crore in FY17, which is an increase of 55% when compared to Rs41.2 crore revenue reported a year ago.