In today’s world, the idea of a startup isn’t limited to a company that was founded recently, but everything that disrupted the traditional market created a new category, and/or offer products and services that were the need of the hour.
One such startup, that we are going to talk about today in our new series ‘DecaUp’, is Quickr, which even after its 10 years of its existence is considered a startup.
In 2008, Pranay Chulet realised that India needed its own Craigslist, and founded the platform Quikr with Jiby Thomas, who later left the company in November 2012. It has been 10 years ever since, and it suffices to say that the company has gone through its fair share of ups and downs.
Let’s look at the comprehensive journey of the company from being a startup to one of India’s prided unicorns.
Funding, Valuation and Acquisitions
Quikr has been backed by few of the world’s reputed investment giants like Kinnevik, Matrix Partners India, Omidyar Network, Norwest Venture Partners, Nokia Growth Partners, Warburg Pincus and eBay Inc.
Kinnevik AB led the $150 million round in April 2015 that marked the date for Quikr’s transformation into a Unicorn startup with the company valuation above $1 billion. However, according to Kinnevik’s last Annual Report, Quikr lost its unicorn status for the period ending December 2017, where it was valued at $885 million and the dip in valuation was about 12 per cent. The company explained this dip was caused due to lack of cash element in all-stock transactions which weren’t considered fair for valuation as well as due to currency fluctuation.
Later, the Q2 report by Kinnevik mentioned a 16 per cent growth in the company’s valuation, which restored the company’s status as a unicorn.
Meanwhile, Quikr acquired 13 companies within 25 months (Nov 2015-Dec 2017). Indian Realty Exchange (IRX), RealtyCompass, CommonFloor, Grabhouse, Zimmber, HDFC Realty, and HDFC Red were acquired (the last two partially) to help Quikr to strengthen QuikrHomes, which accounted for 30 per cent of its total sales, the largest share, till the end of 2017.
While Babajob and Hiree were merged into Quikr for the sake of QuikrJobs, ZapLuk, Salosa, StayGlad were consolidated to improve its own beauty services based brand AtHomeDiva. Stepni.com was acquired to add to its QuikrCars vertical.
Brands, Verticals and Partnerships
In these 10 years, Quikr launched two of its own brands, Dazzlr and AtHomeDiva. While the former is an attempt to offer tailored solutions to artists and casting professionals for cinema, television, theatre, advertising etc., the latter, is launched to cater to the high demand of specifically beauty services in QuikrServices, now called QuikrEasy.
Quikr currently operates under seven major verticals on its website – Bazaar, Easy, Cars, Bikes, Jobs, Homes, and Learner. Till 2017 QuikrHomes was the largest contributor to its turnover.
Quikr also forged a partnership with ItzEasy for its services vertical, Pepperfry to enable better and easier sale of furniture for both, and Truecaller for enhancement in customer services and call pick up rates under ‘Priority Call’ feature.
Apart from these, Quikr also launched QuikrNXT that enables users to contact each other for exchange purposes without having to share personal details, QuikrDvlpr that was a classified community for developers, and QuikrScanner which enabled consumers to check condition and quality of a listed product across verticals.
Since the market was challenging, Chulet had to launch multiple services like the missed call service to tap people with no internet access, an MSP (Maximum Selling Price) calculator to estimate a reasonable price for goods, an instant messenger type experience to enhance engagement between buyers and sellers, and the Quikr doorstep service to further encourage C2C transactions.
Entrackr tried to contact the company to get an idea of how these brands and verticals were contributing to its growth but received no response.
Revenue and Loss
As per Chulet’s statement, Quikr generates revenue through premium listings which get more visibility compared to free ads, and by generating customer leads for businesses. Moreover, depending on the scale of their traffic, advertising also becomes a source of revenue for them.
The last three filings of Quikr reveal the revenue, loss and expense patterns. The filings prior to FY15 was not in accessible format. Interestingly for Rs 25 crore of turnover in FY15, Quikr spend Rs 382 crore on the advertisement, and in FY16 the turnover only increased to Rs 41 crore with Rs 400 crore invested in the advertisement.
In FY17 Quikr narrowed down its losses and expenses with a minimal increase in revenue. The financials for FY18 have not yet been filed with the Registrar of Companies but the company claims to have earned Rs 202 crore and it expects to be profitable by FY19.
According to a report by Tech Circle, Pranay Chulet takes away the highest remuneration (including ESOPs) amongst the CEOs of startups that are unicorns or are nearing that mark. He took home Rs 6.35 crore in FY17, and Rs 10.04 crore in FY16. Meanwhile, the revenue of the company in FY17 is second lowest amongst the unicorns.
As we noticed in the RoC filings, Quikr spends heavily on its advertisement and promotion. And looking at its history, that is not a development that took place in the past 3 years but has been going on since the startup was in its early stages.
The campaign that made Quikr famous in 2012 said “Quikr ko miss call marna” that encouraged the non-internet using population to buy or sell via the classifies web portal through its missed call service. Later in the year, the classified platform started ‘Quik India Movement’ to “celebrate” impatience.
Next year, Quikr came up with various ad campaigns that quickly followed the incidents in the cricket world, like the unsold IPL players saga and the spot-fixing incident.
Later in 2014, Quikr, under Vineet Sehgal as the new CMO, teamed up with the fast-growing youth platform All India Bakchod and Star Plus to target two of the largest market segments that could grow its business.
In 2015, Quikr hired Ranveer Singh as their brand ambassador and changed its brand logo and slogan from ‘No fikar, Bech Quikr’ to ‘Aasan hai badalna’ and made a campaign out of the idea that the simple act of buying and selling goes as far as transforming your life and represents your choice to bring in changes. Interestingly, this came after Quikr changed its headquarters from Mumbai to India’s startup capital Bengaluru to get greater access to the tech sector.
Since 2017, Quikr had been promoting its separate verticals, especially the QuikrEasy brand, with separate ads that aimed to specifically strengthen their respective segments.
We will further go on to see how these advertisement campaigns did not make much of difference to the firm even when the investment was huge.
In an interview with Forbes in January 2016, Pranay Chulet, the face of the decade-old online classified platform, talked about how the launching of verticals, brands, shifting headquarters was a move to scale-up the company.
As a true marketplace, for Chulet, the idea behind incubation was to let the external parties build the platform than to completely build it from scratch on their own.
In the same interview, Chulet claimed that QuikrHomes and QuikrServices, now QuikrEasy, were the largest verticals revenue-wise. Through classifieds, Quikr doesn’t expect much revenue from cars and bikes, but they bring more traffic.
In a report by Mint, Chulet further explained how as of December 2017, Quikr’s largest vertical was the homes category with 30 per cent of the company’s total revenue, used cars and bikes segment with 20 per cent and the services segment contributing 15 per cent, while QuikrJobs contributed another 15 per cent to the same. The rest came from user transactions and goods sold via its online classifieds marketplace. As per Quikr’s webpage iPhones, Android smartphones, and laptops are the trending items in the Bazaar segment.
A year ago, in an interview with VCCircle, Chulet said, “We initially started with a broad focus on consumer transactions. As of today, we are a collection of verticals focused on a few key categories that have traditionally seen chaotic transactions,” talking about how Quikr transformed within 9 years.
Aiming to reduce the gap between India and Bharat, Chulet revealed the idea behind Miss call services and acquiring Babajob to create a marketplace for blue-collared jobs.
The future of the company lies in becoming bigger, evolving, and strengthening the verticals, as per Chulet’s vision. The success metric of the company according to him is a positive cash flow and the startup aims to become profitable by 2019.
Since inception, Quikr has been a part of various controversies. In June 2015, Quikr was under speculation for enabling advertisement of fake degree sale on the platform. It also came into headlines in 2016 when it fired 150 employees of CommonFloor in one go.
The online classified platform, that has been under the scrutiny for the sale of animals and pets over the platform for a few years, was recently called upon by PETA for violating animal-welfare regulations along with its global rival OLX. In response, according to a report by Financial Express, Quikr took a cooperative stance and launched an awareness programme for its consumers to educate them about the rules and deleted a few thousand ads.
Talking about rivals, OLX started aggressively advertising in India 3 years after the launch of Quikr in 2011, but as per its own claim, it was already dominating the market by 2013 with 60 per cent market share. Morgan Stanley called OLX the “undisputed leader in India” in a 2013 report. As of now, OLX India is a profitable company with its profit growing from Rs 6.1 crore in FY16 to Rs 8 crore in FY17. If we compare the search traffic of both the companies on Google in India since 2011, we can clearly see how OLX dominates Quikr by a huge margin.
The QuikrEasy segment of the company was directly challenged and affected by the launch of UrbanClap in 2014. Even the launch of Facebook Marketplace in India in January this year is set to affect the growth of Quikr due to its ease of access whereby people can buy and sell items while socially networking in their free time without having to open a different platform.
The QuikrCars vertical directly competes with numerous startups that solely focus on the used car segments and are bigger platforms like, CarDekho, Droom, etc.
Keeping in mind its hefty investment in an advertisement in a country where people pay little heed to promotions, its cumulative operational revenue of Rs 64 crore in FY17, a little too little for a decade-year-old company with the status of a unicorn, reflects how it needs to up its game and choose alternate strategies.
The revenue figure of Rs 109 crore in FY17 seems particularly grave when we look at the revenue of another 10-year-old startup with Unicorn status, Zomato, which stood at Rs 309 crore in FY17 and Rs 481 crore in FY18.
Henceforth, the moot question is – will Quikr be able to accelerate the revenue churn in multiples? Since the company is facing fierce competition from old as well as new rivals- OLX and UrbanClap, the chances of exponential revenue growth are actually slim.
Last but not the least, considering the ambiguous future plans of Quikr, it is uncertain how the company would achieve its aim of becoming profitable by the end of FY19.
Update: A line about Quikr’s valuation in Kinnevik’s Q2 2018 report added.
Entrackr is starting a new series ‘DecaUp’ to highlight the journeys of startups that were founded a decade ago.