Finding an accommodation can be a real pain in India especially in metro cities. It is almost impossible to find suitable accommodation, without paying brokerage to a property broker.
Most often, the brokers show the worst and non-moving flats in the given rental range which do not fit the requirement. This results in a complete waste of time and causes great inconvenience as one is unable to find a suitable house quickly.
And even after you find one through brokers there is always a chance of property being troublesome.
This led to the foundation of NoBroker, a property search portal that eyes to revolutionise house hunting by eliminating brokerage and middlemen. The company was founded by Amit Kumar Agarwal, Akhil Gupta and Saurabh Garg after their personal bad experiences in Mumbai and Bengaluru in late 2013.
“With NoBroker, we want to enable the customer by creating an ecosystem of genuine owners and customers. NoBroker gives smart recommendations to the customers based on real-time data and assists the customer in making an informed decision,” says Akhil, one of the co-founders of NoBroker.
NoBroker offers all the services with embedded technology in the app.
It provides smart recommendations to the customers based on real-time data and assists the customer in making an informed decision. “Customers can also create customized rental agreements on the site and get it delivered to their doorstep,” adds Akhil.
Weeding out brokers: USPs of NoBroker
The platform’s process of finding an accommodation is cost effective and convenient. All that the users need to do is, fill in basic information like name of tenant and landlord, permanent address, security deposit etc along with the UID (Aadhaar No.).
“You book an appointment for registration and we come to your preferred address to take your biometric signature. And that’s all, your rental agreement is home delivered within three working days,” explains Akhil.
There is huge information asymmetry in the market. There is no company in the ecosystem that has taken up the challenge to solve the problem of broker or middlemen.
“We decided to take up the challenge with the help of technology. NoBroker is facilitating perfect matchmaking with the help of technology. And by doing so helping the customers save more than Rs 55 crores of brokerage every month,” says Akhil.
NoBroker also offers a unique ‘Click & Earn’ feature. This feature helps in ‘crowdsourcing’ of owner listings. All one has to do in the ‘click n earn’ feature is to click the photo of a ‘ To-Let’ board, send it through the app and get cash awards for every successful listing.
Revenue model: House hunting through paid subscription
NoBroker has a freemium as well as subscription-based membership where the customer has multiple subscription plans to choose from.
The company wants to maximize the reach and hope to be present in top cities of the country. Moving forward, NoBroker will keep on evaluating the entire value chain of real estate transactions and keep offering smart technology-led solutions.
“Our endeavour will always remain to enable the customer with our technology which ensures that people find homes without having to go to brokers,” quips Akhil.
Less than 1% users are paid subscribers
Collectively, No Broker claims it has about 1 million users interacting with the platform on a monthly basis. Additionally, it asserts that it’s adding 180K (1.8 lakh) users every month. But the moot question is – how many actually seek paid subscription.
“Less than 1 percent of aforementioned monthly users,” says Akhil. While Akhil didn’t throw any specific figures for paid subscription, less than one percent essentially highlights the number below 10,000.
NoBroker claims CAC 90% cheaper than online relators
The company posted a revenue of Rs 1.1 crore during the fiscal year 2015-16 while losses stood at Rs 14 crore in the same fiscal. Unlike other online real estate platforms, NoBroker claims to have a very low consumer acquisition cost (CAC cost) in two digits. Though Akhil doesn’t give any figure, he adds, “Our CAC is about 10-15 percent of the cost incurred by other large players in the segment.”
Size of opportunity NoBroker eyes at
The market size of residential rental and resale brokerage alone in top 20 cities in India is a whopping $ 12 bn which is estimated to grow to $17 bn in next 5 years.
Real estate’s contribution to the gross domestic product is expected to be 13% by 2028. In absolute terms, the size of the sector is expected to touch $853 billion by that year, according to a report by KPMG.
The report also states that each year, 10 million people move to cities, which is pushing up demand for rented and new homes. Residential rental brokerage amount globally is $200 billion per annum.
The market size of residential rental brokerage alone in top 20 cities in India is a whopping 36300 crores ($4.1 bn). The basis of the above assessment is the National Housing Board and Government of India Census 2011.
NoBroker has a team of more than 300 members. The total funding raised by the company is $20 million (Rs 135 crores) from likes of SAIF Partners, BEENEXT, Digital Garage, BEENOS, and others. Influential angels including Vijay Shekhar Sharma and Anand Chandrasekaran also invested in it.
Expansion pipeline: Presence across 20 cities by 2019
The platform is closing a few thousand subscribers every month. For tenants, subscription starts from Rs 999, which provides 25 contacts. It also has Relax Plan at Rs 1,999, in which tenants get relationship manager to fix owners meetings providing locality level expertise.
It also runs refundable Money Back Plan at Rs 5499 with a validity of 45 days. For owners, it offers a similar plan starting with Rs 2999.
Till date, NoBroker has served 3.5 million customers. NoBroker app has more than 1 million downloads on Google Play. In next three-four months, the company plans to open services in more cities. By next year it plans to expand to 20 cities.