With an estimated cash burn of $2 million a month, Housing.com is believed to be readying for another round of funding.
With an estimated cash burn of $2 million a month, Housing.com is believed to be readying for another round of funding. The real estate portal, which posted a loss of Rs 279 crore in FY15 on revenues of Rs 12 crore, is understood to be looking for $30 million, in what seems like a big ask.
Vineet Singh, who recently came on board as investor and adviser to Housing.com, said the company is in talks with investors for bridge funding and will close the next round soon. Singh, former business head at 99acres.com, said that the performance of most real estate portals had been under pressure due to the current economic environment.
“Housing.com’s investors are here for the long term and everyone realises that reaching operational profitability may take a few years,” he added.
Pertinently, comScore data reveal the unique visitor count had declined to 0.6 million in January 2016, less than a fourth of the 2.8 million in April 2015 and almost a fourth of what competitors command. Total visitors were 1 million in January 2016, from 8.2 million September 2015.
Moreover, there has been a fair bit of churn at the firm. At one point the portal had 2,500 employees but after two rounds of lay-offs that let go of close to 900 people, sources say the employee count is down to 500-600. The company was not willing to share the numbers. Last week three co-founders, Abhishek Anand, Ravish Naresh and Sanat Ghosh, quit with sources saying the investors may be looking for fresh blood.
One co-founder who quit recently denied he was asked to leave. He, however, said he was partially engaged in developing a product for a venture with other co-founders. Four more co-founders — Snehil Buxy, Amrit Raj, Jaspreet Saluja and Neeraj Bhuval — remain at the firm.
In November last year, Housing.com gave up the rental listing business. New offerings, including underwriting inventory sold on the portal, are believed to be on the cards.
Ashish Gupta, co-founder and senior MD, Helion Venture Partners, said, “Sorry, we do not comment on company matters.” Mails to board members of Housing.com representing the venture capital firms Helion Ventures, Nexus Ventures and SoftBank remained unanswered. An email sent to Housing.com did not elicit a response with the CEO declining to comment.
The housing portal, which competes with 99acres.com and Magicbricks.com, has so far raised $132 million in five rounds.
SoftBank, the largest investor with a stake of around 45%, infused $15 million in January, topping the earlier funding of $75 million in November, 2014. The amount is understood to have fetched it a 15% stake. The investor may not lead the next round but may support other investors, sources said. Others investors include Falcon Edge, Nexus Venture Partners and Qualcomm Ventures.
In the early days, Housing.com was clocking 100,000 unique visitors per day, posing tough competition to its rivals.
However, over the past year, the portal, founded by a group of IIT Bombay students, has been in the news for all the wrong reasons including a very public spat between investors and its former CEO Rahul Yadav, who was eventually asked to leave.
The timeline section on the website, which typically noted some positive development almost every two months, has not been updated for the last six months.
Real estate portals have been under pressure. In April this year the NCR-based Indiahomes.com shut shop after failing to secure funding. Online classifieds firm Quikr bought real estate portal CommonFloor in a distress sale in January.
According to Indian Brand Equity Foundation Research, India’s real estate market is expected to reach $180 billion by 2020 from $93.8 billion in 2014.