This May Snapdeal just might close a deal with online real estate company Housing.com. Word from investment bankers and sources (close to the deal) is that the marketplace is in the final stages of acquiring Housing.com. They also say the acquisition commenced last December and is likely to be finalized for $50-100 million.
Snapdeal and its new likely conquest have a common investor, SoftBank. It is believed that SoftBank facilitated the deal between both companies. The founders of Snapdeal Rohit Bansal and Kunal Bahl are also are angle investors in the internet based real estate company.
We are still not aware of whether or not Snapdeal will take over the digital firm’s operations or simply take up a major stake and let them function independently.
Snapdeal and SoftBank did not comment on the matter but Housing.com denied plans of selling to Snapdeal.
“The company is performing very well and we are steadily moving towards becoming the most trusted platform to buy and sell homes in India. We are not in any talks with Snapdeal for a sale,” the firm’s spokesperson said.
Market watchers say this acquisition appears logistical! Snapdeal has a huge data base which can be easily leveraged to run a housing business. But will it be enough for them to overcome competition from dominant players Magicbricks and 99acres as well as new comers OLX and Quicker.
This is not Snapdeal’s first tryst with the property segment. In 2014, they tied up with Tata Housing. In 2015 it tied up with TDI Infracorp in 2015. The home grown marketplace is strengthening its brand by differentiating itself from ecommerce marketplaces Flipkart, Amazon and the rest. Recently it also partnered with JLL India’s Residential Services division.
Housing.com had a troubled past couple of months. The company was started in 2012 with the aim to solve the issues with house searches. In the last 12 to 18 months it experienced numerous controversies.
It started off with a public spat between the company’s founder Raul Yadav and Sequioa Capital. (Sequioa Capital is not an investor in Housing.com). His unprofessional behavior with SoftBank caused some friction until finally he exited the company.
Most of the founding members have left the company, yet it manages to stay afloat due to recent top level hiring. No new funds have been pumped into Housing.com since November 2014, when SoftBank invested $90 million into the firm.
Also is it really a good time to be in real estate? With the market slump and most of the online realty companies taking big hits?
Looking on the brighter side of Housing.com, it has managed to close everyone of its rental and commercial listings and is now focusing on buying and selling homes. Despite the struggle for revenue, the real estate company has managed to reduce its cash burns just enough to optimize costs. According to estimates it is likely that the company brought down its cash burns to $3 million in the last few months from $5 million per month last year.
So what’s it going to be Snapdeal? Deal or no deal?