SoftBank to invest in Housing.com3 min read . Updated: 17 Dec 2014, 12:05 AM IST
SoftBank Group will lead an investment of $90 million in Housing.com, becoming its largest investor
It will be SoftBank’s fourth investment in India this year. The company had invested $627 million in online retailer Snapdeal.com. It also led a $210 million round of investment in ANI Technologies, owner of Ola Cabs, a Web-based taxi-hiring service. Bharti SoftBank, a venture of the Bharti Group promoted by Sunil Mittal and SoftBank, had also made an investment in media start-up ScoopWhoop.com.
Housing.com has now raised more than $121 million in two years in five rounds of funding.
The SoftBank Group said Housing.com plans to use the funds to map over 40 million houses across 300 cities in India in the next one-two years. The company currently provides searches in 45 cities with a strong presence in western and southern India.
“Through this partnership with Housing.com, SoftBank aims to further invest in the digital infrastructure of India and build synergies with its network of Internet companies in India and around the world," the SoftBank Group said in a statement.
“Once we have mapped a house and the details are stored in our database, whenever that property comes up for leasing or sale again, the property owner or broker just has to turn on a button and the property will be listed on Housing.com again," said Advitiya Sharma, co-founder of the real estate portal.
The company has a data collection team of nearly 500 and employs some 1,500 people. Sharma said the company will hire more people as it looks to expand to 300 cities. It is also looking at different business models such as franchising as it expands.
Housing.com has been receiving requests from companies in South-East Asia and the Middle East for technology tie-ups, but Sharma said its focus right now is on the Indian market.
The company is also looking to increase the number of services it offers to consumers. “We have already started with rental agreement documents and home loans. Going ahead, we will add mover and packer service and interior decoration services," Sharma said.
The company had recently tied up with Tata Value Homes Ltd, a unit of Tata Housing Development Co. Ltd, to exclusively sell homes online using its website. Tata had put an inventory of 150 homes in four projects across three cities for sale, Mint reported in November.
“We have sold more than half of the inventory through this exclusive tie-up, which is gross sales of around ₹ 50 crore," said Sharma. There were buyers from countries such as the US and also from Africa, he said.
The company has received many enquiries from other developers for similar tie-ups, said Sharma.
Experts, however, said that the real estate industry presents significantly different challenges compared with online retail, which has been a huge success in India, and how the online real estate portals will overcome them is yet to be seen.
“Unlike retail, there is no standardization in real estate. There is no guarantee that what is shown in the brochure is what a buyer will eventually get. How will these portals handle challenges like these remains to be seen, because the buyer might hold them responsible for it if the transaction was done through them," said Raja Kaushal, managing director of Gatere Real Estate and Infrastructure Advisory Services Pvt. Ltd, a realty consultancy.
Real estate is a trust-driven business, and developing that sort of trust in consumers will be a big challenge for an intermediary such as Housing.com, he added.
In late November, News Corp. announced the acquisition of 25% stake in the company that runs PropTiger.com, another digital real estate platform focused on India.
In September, realty portal CommonFloor.com raised its fifth round of funding from existing investor Tiger Global.
The same month, Info Edge (India) Ltd, which runs Naukri.com, India’s No. 1 jobs site, raised $125 million through a share sale to banks and financial investors to invest in its real estate portal 99Acres.com.