Property search websites are raising significantly more investments than before from venture capital (VC) and private equity (PE) firms, largely on their potential for growth although the overall market remains sluggish.
These companies, which primarily help homebuyers search for properties through listings and advertisements on their websites, are adding a number of services such as assisting with loans as well as opening offices abroad to cater to the vast Indian diaspora.
While real estate sales slowed in India in the past few years, VC and PE firms increased investments in property search websites—to about $12 million (around Rs.65 crore today) across seven deals in 2012, from about $3.9 million in two deals the year before, according to estimates by researcher VCCEdge and Mint research based on disclosed transactions.
More investments are being lined up this year.
PE firm Indus Balaji plans to invest an undisclosed sum in Perfect Pincode, after having funded it about $3.5 million so far, to allow the Hyderabad-based search company add services for non-resident Indians or even buy another firm, said Mohit Ralhan, managing partner.
Real estate search companies enjoy the twin benefits of high profit margins and low customer acquisition costs, making them ripe for investments, said Ralhan.
Investors expect real estate search websites to grow rapidly in the next few years as they add services and help create demand online.
India World Technologies Pvt. Ltd (formerly Agni Property Services), which runs property search website IndiaHomes.com, is looking to raise $15-20 million from investors this year to enhance technology and tap demand from abroad, said Manish Mehta, vice-president, business development.
The Delhi-based company that helps buyers with documentation and advisory services has raised around $18 million so far from VC firms Helion Venture Partners Llc and Foundation Capital. It is present in nine cities and plans to start operations in Pune, Ahmedabad and Chennai.
Another website, bestpropertydeals.co.in, that assures discounts for buyers by directly negotiating with builders, is looking to raise about $1 million from VC funds or angel investors, said Raj Sharma, managing director.
“This space has high potential to create a large market but it largely depends on execution play...there is a lot of scope for growth,” said Padmaja Ruparel, president, Indian Angel Network, which in 2011 invested an undisclosed sum in real estate group buying website groffr.com.
CommonFloor.com, another real estate search website, raised an undisclosed sum last year in a second round of funding from existing investor Accel India and Tiger Global Management, a New York-based investment firm.
“The capital will be used for growth, for installing mobile application, operations and sales,” said Sumit Jain, co-founder and chief executive, CommonFloor.com.
“The domain is still very nascent, and people still won’t buy online, but they can take a decision to buy or rent online. A portal can connect a buyer and a seller.”
These companies, which primarily help homebuyers search for properties through listings and advertisements on their websites, are adding a number of services such as assisting with loans as well as opening offices abroad to cater to the vast Indian diaspora.
While real estate sales slowed in India in the past few years, VC and PE firms increased investments in property search websites—to about $12 million (around Rs.65 crore today) across seven deals in 2012, from about $3.9 million in two deals the year before, according to estimates by researcher VCCEdge and Mint research based on disclosed transactions.
More investments are being lined up this year.
PE firm Indus Balaji plans to invest an undisclosed sum in Perfect Pincode, after having funded it about $3.5 million so far, to allow the Hyderabad-based search company add services for non-resident Indians or even buy another firm, said Mohit Ralhan, managing partner.
Real estate search companies enjoy the twin benefits of high profit margins and low customer acquisition costs, making them ripe for investments, said Ralhan.
Investors expect real estate search websites to grow rapidly in the next few years as they add services and help create demand online.
India World Technologies Pvt. Ltd (formerly Agni Property Services), which runs property search website IndiaHomes.com, is looking to raise $15-20 million from investors this year to enhance technology and tap demand from abroad, said Manish Mehta, vice-president, business development.
The Delhi-based company that helps buyers with documentation and advisory services has raised around $18 million so far from VC firms Helion Venture Partners Llc and Foundation Capital. It is present in nine cities and plans to start operations in Pune, Ahmedabad and Chennai.
Another website, bestpropertydeals.co.in, that assures discounts for buyers by directly negotiating with builders, is looking to raise about $1 million from VC funds or angel investors, said Raj Sharma, managing director.
“This space has high potential to create a large market but it largely depends on execution play...there is a lot of scope for growth,” said Padmaja Ruparel, president, Indian Angel Network, which in 2011 invested an undisclosed sum in real estate group buying website groffr.com.
CommonFloor.com, another real estate search website, raised an undisclosed sum last year in a second round of funding from existing investor Accel India and Tiger Global Management, a New York-based investment firm.
“The capital will be used for growth, for installing mobile application, operations and sales,” said Sumit Jain, co-founder and chief executive, CommonFloor.com.
“The domain is still very nascent, and people still won’t buy online, but they can take a decision to buy or rent online. A portal can connect a buyer and a seller.”
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