CommonFloor, a leader of the space, just added fresh ammunition to its war chest: anonymous social network app for Indian students Bakfy. This young startup was acqui-hired for its three co-founders Ashutosh Garg, Rajesh Eswarlal, and Niranjan Bala who are experts in the mobile networking space.
Garg, Eswarlal, and Bala will join CommonFloor as entrepreneurs-in-residence. “We will work directly with CommonFloor founders Sumit Jain, Lalit Mangal, and Vikas Malpani, to build social and mobile products,” Ashutosh Garg says.
The Bakfy app is a combination of Twitter, Facebook, and Secret. It lets college students share complaints, gossip, and chat with one another anonymously. Users can sign up using their Facebook ID, and pick an anonymous user name on Bakfy. They don’t have to add friends or follow anyone like on most other social networks. The name of their college will be appended to their anonymous posts. This app addressed a need for privacy among college students who hate to go on record about their opinions about their college, studies, and friends.
Tech in Asia wrote about Bakfy two months ago just as they sprouted wings. The Bakfy team was looking to raise funding then, and met the CommonFloor founders at a hackathon. “We got talking there. Sumit and Lalit loved our ideas, and surprisingly, made an acquisition offer to us,” Garg recalls. He confirmed to Tech in Asia that the acquisition is a cash plus equity deal. The figures are confidential though.
Post acquisition, Garg, Eswarlal, and Bala will focus entirely on CommonFloor but will not shut down the Bakfy app – “we do have thousands of active users.”
Indian Institute of Technology (IIT) Roorkee graduates Sumit Jain and Lalit Mangal started CommonFloor in December 2007 with another techie friend Vikas Malpani. Initially, it was meant to be an online space where people living in large apartment complexes could interact and collaborate to solve problems they had in common. It grew into a real estate portal when people started posting their houses for rent or sale on the platform. But its key differentiator is still the community platform where house-owners, property seekers, and tenants connect, interact, and solve issues. For instance, a prospective buyer can send out a query on amenities, child safety, or any other aspect of living in a particular apartment complex, and she is likely to get responses from people actually living there.
In that sense, CommonFloor too is a social network. Seen from that perspective, the acquisition of Bakfy is a good fit with CommonFloor’s culture. “The helpful, community nature is our core value and it is something we will have to keep our eyes on while we scale.” Sumit Jain, co-founder of CommonFloor, told Tech in Asia in an earlier interview when it raised US$30 million.
CommonFloor’s main rival is Mumbai-based Housing, which recently raisedUS$90 million from Japan’s SoftBank. It pioneered the use of mobile map-based technology to locate and verify the property listings.
When Sumit Jain started up CommonFloor on December 22, 2007, along with IIT Roorkee batchmate Lalit Mangal and another techie friend Vikas Malpani, he never dreamt it would one day be a real estate portal – and one of India’s leading ones at that.
It was only meant to be an online space where people living in large apartment complexes could interact and collaborate to solve problems they had in common. In fact, the three friends came up with it after failing to solve a sewage problem, which eventually forced them to leave a rented apartment they were sharing in Bangalore.
They had tried to engage the other residents through Yahoo Groups, believing there would be strength in numbers, but the experience left them frustrated. “An email that goes out to everybody doesn’t solve anything. We needed a better way to collaborate with our neighbors. So we decided to create a platform that would provide more targeted communication to begin with, and then other shared services,” recalls Jain.
For example, an email meant for apartment owners would not also go to tenants, or if it was a matter for Block A, that’s where it would be confined. Of course, for this to work, the residents had to sign into the portal with their property and other details, but since it was a closed network, most people didn’t mind. An outsider would still have to knock and be admitted, just like in the real world.
It turned out that apartment complex dwellers were only too happy to have an online facilitator like this for their interaction, problem-solving, and a host of other reasons. Within 45 days of its launch, 100 housing societies had adopted CommonFloor.
A platform for high net-worth people
The portal evolved quickly as new uses emerged, from lists of vendors to property management and society accounts. For example, a security agency’s service could now be rated easily, and also shared with other apartment complexes. This became an incentive to provide better services for everyone – from chauffeurs and grocers to landscape designers and water suppliers.
One day a businessman living in one of the complexes asked if he could put up an ad on the network to sell trinkets he sourced from his native Rajasthan. This opened the first significant monetization avenue for CommonFloor because suddenly there was a realization that it was a platform for high net worth people to whom businesses would want to make offers. “For starters, it took care of our server charges,” says Jain.
By then, VCs had grown interested too: “We got three emails from different VCs in one day,” recalls Jain with satisfaction, proud of the fact that their startup was sought out by VCs rather than the other way round.
They settled for seed funding from Accel Partners, who advised the young CommonFloor founders to focus on building the product and not get sidetracked by money-making opportunities.
It wasn’t until 2009 that they started noticing a number of people putting up queries about properties available for rent or sale. The penny dropped. The next year CommonFloor started listing properties with the consent of owners who were happy to do this on such a relevant community-based portal rather than going to multiple brokers or general purpose public advertising outlets.
Soon it became a full-fledged real estate portal connecting property seekers, owners, dealers, and builders. What makes it different from every other portal is a network of more than 100,000 apartment complexes in 120 towns and cities across the country that use CommonFloor for community-based activities.
This year, in January, CommonFloor raised US$10.4 million from existing investors, Accel India and Tiger Global in series D funding. In July last year, the startup had raised US$7.5 million from the same investors, which brings the total money raised by CommonFloor to around US$17.9 million.
Its roots go down to a reading community
Jain’s exposure to using the web as a social connector goes back to his IIT student days. He had interned with a startup called iRead in Bangalore, spurning a more lucrative offer from IT services MNC Wipro. iRead was simply a platform for sharing what people were reading, which seems rudimentary now, but a novel concept then.
Family expectations made him take up a job with Oracle after college, but it was the two months at iRead that he still cherished even a year later. His college buddy Lalit Mangal was also at Oracle, and they spent many an evening talking of starting up. Finally, they decided to quit and give it a shot with their friend Vikas Malpani. “We thought we would dedicate one year to what we wanted to do. If it didn’t work out, we would go back to a regular job and work peacefully without obsessing about starting up all the time,” Jain tells Tech in Asia.
Their first project was BanKaro (which translates to ‘ban it’) – an SMS based system to flag unwanted telemarketing calls. This was in 2006, before the advent of a do-not-call (DNC) registry in India. LookForOffers followed, again an SMS service before ecommerce had arrived. UgalDo and a few other failed attempts later, they hit upon CommonFloor, whose original name was in Hindi – ApnaIlaka or ‘Our Neighborhood’.
By then, they knew the internet was the place to be, and not SMS-based models where they were dependent on telecom gatekeepers for entry.
Today, with nearly 400,000 active listings, CommonFloor is one of the most visited property portals in the country. The founders’ tech moorings are reflected in an augmented reality map-based mobile app to signal available properties in a customer’s vicinity, drones to take pictures of panoramic views from planned high-rise apartments, and systematic photographic verification of properties listed.
But above all, what Jain appreciates, is the power of the community behind CommonFloor which has over 10 million homes registered with it. A prospective buyer can send out a query on amenities, child safety, or any other aspect of living in a particular apartment complex, and she is likely to get responses from people actually living there. This is what makes CommonFloor unique as a real estate portal.
A clear differentiator is important in a crowded Indian marketplace, with at least six major real estate portals jockeying for position. These include the first movers – MagicBricks, 99acres, Makaan, and IndiaProperty – and the newer, more tech-savvy ones, Housing.com and CommonFloor, both started by IIT engineers.
A consolidation like that in the US, where the No.1 portal Zillow just bought the No.2 Trulia for US$3.5 billion, is yet to happen in India. But even if that were to happen, the community engagement would set CommonFloor apart. That’s because it’s more than just a property portal. It’s also a network of over 100,000 communities in 120 towns and cities across the country, where residents are actively talking to their neighbors, discussing, and solving common issues.
Housing.com, one of India’s leading real estate portals, raised US$19 million in its fourth round of funding from Helion Venture Partners, Nexus Venture Partners, and Qualcomm Ventures yesterday. In the current round, Helion has pumped in US$8 million, Nexus invested US$7 million, and Qualcomm put in US$4 million. Currently, the portal has 109,035 verified property listings across 23 Indian cities. The current round of funding will help it expand to more cities across India, map more houses, and invest more into technology, Advitiya Sharma, one of the co-founders, told e27.
Housing has been a trail-blazer among Indian real estate portals. The startup was the first to bank heavily on technology to make house-hunting in India easier. Founded in June 2012 by 12 young engineers from IIT Bombay, Housing.com entered the market with a clear differentiator: credible information backed by data. They introduced map-based search, forcing others in the online real estate space to follow suit.
Virtual tour as a clincher
Early on, Housing — then Housing.in — put together a data collection team. They visit every home they list, collect and verify information, click photos, and record geographical location points. These details are tagged with the listing on the site. A user can go on a virtual tour through the houses listed, explore the neighborhood, and see if the area fits her tastes. These features proved to be a clincher for the Mumbai-based startup, which has seen enviable growth in two years.
Housing launched its Android app and mobile website back in October, 2012. The main competitor, CommonFloor.com — another startup founded by IITians — launched its app in May 2013.
The Housing team’s keen eye for technology got them the first round of funding from angel investors in February 2013. They used it to expand operations to Hyderabad. The second round of angel funding came in another month. By the end of May 2013, Housing beat Makaan.com — promoted by established Indian consumer internet company People Group — and Indiaproperty.com — launched in 2006 — in the percentage of reach.
The third round of funding of US$2.5 million, this time from Nexus Venture Partners came in June, 2013. They used it to build a data science lab to “sieve through mountains of data to develop indices and metrics that help us identify consumer needs.” The team upped the ante by building heat maps, demand flux maps, lifestyle rating, locality insights, a child friendliness index and other tools.
Global ambitions
In September 2013, Housing.in became Housing.com, acquiring the domain name and also a national number: 03-333-333-333 for a whooping US$1 million. In a statement at the time, co-founder Sharma said this was the company’s first step towards global expansion.
In January this year, Bangalore-based maxHeap Technologies Pvt Ltd, which owns CommonFloor, had secured US$10.4 million in Series D round of funding from their existing investors Tiger Global Management and Accel Partners who had pumped in US$7.5 million in July 2013.
The latest round of funds will be mostly be used to fortify CommonFloor’s technology backbone, Sumit Jain, co- founder and CEO of CommonFloor, had said in the company’s blog.
We will use this round to deepen our research capabilities across the board, providing highly relevant content for every home-related need. We will also use this round to develop new products to offer even better content discovery and experience.
Now that Housing too has secured big funding, the real estate war in India looks likely to be fought on a technology turf.
Internet influences buying
Earlier this week, Google India released a study which says that internet research now influences more than half the real estate purchase decisions in India. “This phenomenon of researching online for real estate information before making a decision is not limited to metros but also extended to buyers in tier II cities,” Google India Industry Director Nitin Bawankule told reporters in New Delhi.
In-depth property information and market trends as well as comparison options were the main reasons for buyers to go to real estate portals, the survey across 15 cities by consultancy firm Zinnov showed.
The quality of that information will set a real estate portal apart, and this is what will test the tech mettle of Housing and CommonFloor.
