Property listings portal NoBroker.com has raised $50 million in a Series D round of funding led by US-based investment firm Tiger Global Management. The Startup attempts to improve the way how millions of people in the nation lease or buy an apartment — by not paying any broker fee.
There is no need for brokers
NoBroker is a home rental and purchase platform that helps users
find homes without having to pay for broker service. The five-year-old startup,
which closed its previous financing round in June, has raised $121 million
to date. NoBroker is now valued at about $325 million,
It was founded by Indian Institute of Technology alumni Amit Kumar Agarwal, Akhil Gupta and Saurabh Garg. The company claims it has more than 3 million properties registered on its platform and 7 million users.
Real estate brokers in India, as is true in other markets, help people find properties. But they can charge up to hefty fee as their commission. NoBroker allows the owner of a property to directly connect with potential tenants to remove brokerage charges from the equation.
The startup makes money in three following ways:
- Non-paying users get in touch with only nine property owners. Those who wish to contact more property owners are required to pay a fee.
- Property owners can opt to pay NoBroker to have its representatives deal with prospective buyers
- Offers end-to-end services such as rent agreements, home loans, and movers and packers, for which it also charges a fee.
Co-founder Gupta said the company is using machine learning and artificial intelligence to make transactions faster and cheaper for users.
The business model of NoBroker has also created new local challenges for the startup. As expected, brokers are not happy with startups such as NoBroker and have grown hostile in recent years. They have gone to the extent of attacking and harassing NoBroker employees. The startup eventually had to delist its address from Google Maps. But Kumar said the mindset of people is changing.
The startup processes about $14 million in rent each month, Kumar said. This is increasing by 25%-30% each month, he said. NoBroker’s business in Bangalore and Mumbai, two of its largest cities, are already profitable, Kumar said.