Deal focus: NoBroker eases India's property pain points

India is on track to have the third-largest real estate market in the world by 2030, when the sector will be worth $1 trillion a year and contribute more than 15% of national GDP. As this trajectory advances, upward mobility among the country's millennials is driving increased competition in urban property markets while simultaneously creating demand for more flexible and convenient services. As a result, much of the opportunity set is moving online.

A number of large venture-backed platform have emerged in this context, many of them claiming to offer one-stop packages around leasing and property management, brokerage and agent services, and tenant services such as cleaning, rent collection and communication with landlords. The word "prop-tech" has entrenched itself in the local VC lexicon.

Beenext Capital Management has been tracking this trend since at least February 2016 when it first invested real estate marketplace NoBroker. The firm is now doubling down as part of a $51 million Series C round alongside General Atlantic and SAIF Partners, citing the start-up's deeper understanding of customer pain points and the longer time it has spent perfecting a business model that maximizes the edge technology can provide over legacy counterparts. 

"Their approach is unique, fully utilizing the power of technology, and solving the real problems that both owners and tenants have in India," says Teruhide Sato, founder of Beenext, noting that several of NoBroker's competitors have succeeded in achieving scale but failed to differentiate at the operational level. "They made sure that they solved a problem first, and then replicated the model in other cities. Their frugal approach, along with superior technology, makes them a winner in this space."

NoBroker was founded in 2013 as a platform that matched individual tenants and landlords without taking a commission. It has since expanded into services related to residential resales and commercial properties, including Home Store, a marketplace for transaction services such as financing, packers and movers, and legal documentation. The company claims that it can facilitate the drafting of a rental agreement online within five minutes.

The Series C is hoped to expand a current footprint of Mumbai, Bangalore, Pune, Chennai and Gurgaon, which account for more than 2.5 million registered properties and six million individual users. Efforts to further streamline transactions through increased automation are expected to be the key to the growth agenda, however, especially as customers become increasingly savvy and discerning.

"The real estate transaction process in India has lot of information asymmetry and inefficiencies," says Sato. "NoBroker is solving this problem by bringing transparency and convenience to the entire process, making it much faster, lower-cost and easier. It is a big market, and with the help of artificial intelligence and machine learning, the entire user experience is undergoing a fundamental shift."

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• Topics
• Southeast Asia
• Technology
• Real estate
• Expansion
• India
• Beenext Capital Management
• TMT
• General Atlantic
• Growth capital
• SAIF Partners