Move is expected to accelerate the growth of Quikr Homes
Online classifieds portal Quikr on Thursday announced the merger of real estate listing company CommonFloor.com, making the combined entity the biggest in the space. The deal size was not disclosed by either company.
“The combined entity will have mammoth listings, a wide range of products and consumers get to witness amazing innovation in this space,” said Sumit Jain, co-founder and CEO, CommonFloor.com.
Analysts feel the merger will accelerate the growth of Quikr Homes, the result of a recent verticalisation strategy of Quikr. A senior management official with a leading venture capital fund, who declined to be named, said, “Quikr’s verticalisation strategy saw the birth of Quikr Homes, which is a fairly recent event, whereas CommonFloor.com has been around for over six to seven years. CommonFloor’s domain expertise and Quikr’s huge number of visitors and cross-verticalisation will be a complementing aspect for both businesses.”
“This will also drastically reduce the marketing spends of both the companies, an issue that Quikr has been tackling for a long time,” he added.
Pranay Chulet, CEO and founder, Quikr, has publicly stated that the company is two years away from being profitable and if not for the marketing spends, Quikr would have already been profitable.
While the companies have stated that both entities will be run separately, Mr Jain refused to comment on the differential offerings by both companies. “As of now, we will be adopting a multi-brand approach. The idea is to give consumers the choice,” he said.
CommonFloor has about 1,000 employees across 18 cities in India and has been funded by Accel Partners, Tiger Global and Google Capital. The merger is expected to be completed in the next two to three months.
“Both companies have been well-funded. The investors may not want the brand equity to be diluted, so it makes complete sense to run them as a separate entity,” said a valuation expert based in Mumbai, who too did not wish to be named.
“Consolidation in the space was expected. People were spending a whole lot of money on marketing. Only a couple of companies (99acres and Magicbricks) focused on revenue streams. We will be seeing a lot more consolidation in the space,” added the analyst quoted earlier.
This is the fourth investment by Quikr in the real estate space over the past few months. The first was an investment in AN Virtual World Tech Ltd this October, which runs a hyper-local search engine providing 360-degree street views under WoNoBo.com.
This was followed by the acquisition in November of Indian Realty Exchange, a mobile aggregator of real estate agents. The third investment was buying of RealtyCompass, a real estate analytics platform for consumers and investors. Quikr claims QuikrHomes currently connects customers from over 1,000 cities and towns across India and helps conclude over two lakh transactions per month.
Quikr in tie-up with Boxmyspace.com
Meanwhile, Quikr has recently tied up with Boxmyspace.com, the personal storage solutions provider. As per this arrangement, a consumer wanting to sell old furniture on Quikr can opt to store the product with boxmyspace.com, the link to which is available on the Quikr website.
When clicked, the representative will come and pick up the product, store it in the boxmyspace warehouse and deliver it to the person who buys the product. Under this arrangement, Quikr pays boxmyspace as and when the transaction is done.
This is the fourth investment by Quikr in the real estate space in recent times