The Bangalore-based firm plans to utilize the funds in improving its products, technology and marketing initiatives
Property listing website CommonFloor.com said on Wednesday that it has raised $30 million from its existing investor—American hedge fund Tiger Global Management Llc. This is the biggest round of funding for the Bangalore-based company.
“With the latest funds, we will continue investing towards products, technology and marketing and bring innovation in all these areas," Sumit Jain, co-founder and chief executive officer, CommonFloor.com, said over the phone. The company will continue to scale up its marketing and operations in the 18 cities where it has its offices, for the next six to 12 months, and by the end of the next fiscal, it hopes to open its offices in 22 cities, Jain added.
CommonFloor.com will also invest in its data research team that provides research on properties across cities. “We want to provide better information to the user so that he can take informed decisions while buying property," said Jain.
CommonFloor.com, which launched its first TV ad campaign last month, is now looking to have a “healthy mix of all forms of marketing—traditional, online and multimedia," said Jain.
With the latest round of funding, CommonFloor.com has raised a total of $50 million. The company had raised R64 crore in January from Tiger Global and venture capital firm Accel India. “With the support of the latest funding, we are targeting a revenue of $25 million in the next financial year (ending March 2016)," said Jain. “In the last six months, we have more than doubled our revenue."
The website gets 200,000 visitors every day, and has 500,000 listings from 120 cities, according to Jain. The website also gets more than 25% traffic via mobile app. Over 50% of the traffic comes from metros such as Mumbai, Delhi, Bangalore and Chennai and close to 10% from overseas.
“India’s online real estate sector has been expanding rapidly as Internet access grows, especially through mobile. CommonFloor.com has carefully mapped the needs of the online-based real estate ecosystem and has forged a clear path towards future growth. We are pleased to continue to partner with them," said Lee Fixel, partner at Tiger Global Management.
Investments by venture capital and private equity firms in the fast-growing but still nascent property website space have been growing substantially. Such investments rose to about $23.28 million across six deals in 2013, from about $10.78 million in four deals in 2012, according to estimates by researcher VCCEdge, based on disclosed transactions.
In 2014, so far, there have been five investments in property websites, not including the CommonFloor.com deal—three of these deals add up to $43.99 million, according to data provided to Mint by VCCEdge; details on the other two were not disclosed.
Analysts said that the online business model for renting, buying and selling property has gained traction due to demand for housing and also as more individuals become comfortable with the online medium.
“Investors are realizing the potential in the online real estate portals as more high-paying individuals are turning to the online medium. The online platform also works better as it can provide a far better range of choices to the buyers and sellers," said Kalpana Jain, senior director at Deloitte Touche Tohmatsu India Pvt. Ltd, adding that with a number of such online portals coming up, “the ones with the largest inventory of sellers will survive, and we will see a lot of consolidations and acquisitions in this sector going forward."
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