Following the mushrooming of online real estate startups, the segment is headed for a consolidation that will lead to monetisation and stronger business entities, the latest being the merger of CommonFloor with Quikr’s realty vertical.
Other instances include PropTiger’s purchase of Makaan-.com and Square Yards’ acquisition of three companies in the past year. Last week, another possible deal, with Housing.com said to be in talks with Snapdeal and News Corp for a stake sale is reported by the Economic Times.
The segment has attracted over $250 million in investments over the past two years, a period when realty sales were the slowest in the country. The investments were made by Helion Ventures, Nexus Venture Partners, SoftBank Group, Accel India, Horizen Ventures, Qualcomm Ventures and Nirvana Ventures.
“We will see more such mergers happening now as it is mostly driven by the synergetic value created by the two companies for achieving goals faster. The mergers will be more for acquiring products,” said Alok Goel, Managing Director of SAIF Partners.
“Profitability is dependent on the stage at which these companies are now. India is still at an early stage. Further existence of too many players also reduces margins,” he said.
The current sluggish real estate market is expected to throw up more opportunities for acquisition of entities that are struggling to move ahead.
“There is a huge scope for consolidation, given that there is very limited capital available. There are lot many opportunities available now. We have multiple options available, including fund raising and acquisition for future growth as our burn rate is very low,” said IndiaProperty-.com CEO Ganesh Vasudevan.