Aurum PropTech (formerly Majesco Ltd) is set to acquire the Tiger Global-backed home rental startup NestAway Technologies for Rs 90 crore or $11 million.
Aurum’s board members approved the acquisition of up to 100% shares of NestAway Technologies Pvt Ltd for a cash consideration of up to Rs 90 crore, documents filed with the National Stock Exchange (NSE) shows.
Notably, the acquisition was approved at a 95% valuation cut of NestAway.
The startup was valued at $220 million in 2019. Backed by marquee investors such as Tiger Global, Flipkart and others, NestAway had secured a cumulative funding of $110 million.
This acquisition will add to the consumer-tech segment of Aurum and is in line with the strategy to create its efforts to build an ‘integrated proptech ecosystem’, Aurum said in the NSE filings. The completion of the transaction is expected to take place on or before 30th June 2023, contingent upon the fulfillment of certain conditions.
In June 2022, Aurum PropTech acquired Helloworld, an undertaking of NestAway that provides co-living spaces to students. Aurum managed to successfully scale up its Helloworld operations within a year, paving the way for the NestAway acquisition.
Founded in 2015, NestAway is a technology platform for the real estate market facilitating rental transactions and various services and processes around it. It leverages technology and data to streamline property search, scheduling visits, rent payments and service requests.
Currently, NestAway features 18,000 properties on its platform and has an annualized revenue of Rs 30 crore, consistently attracting significant website traffic of 600,000 visits. It competes with the likes of Stanza Living and ZoloStays.
The massive valuation cut comes in the wake of NestAway’s struggle to improve revenues and cut down losses since FY20. The company’s revenue from operations dwindled 47% to Rs 57.87 crore in FY22 as compared to Rs 108.9 crore in FY20. As per Fintrackr’s analysis, the company’s losses stood at Rs 94.97 crore during FY22.
On a unit level, NestAway spent Rs 3.08 to earn a rupee of operating income in FY22.
On the other hand, Aurum Proptech’s scale jumped 8X to Rs 126.87 crore during FY23 from Rs 15.8 crore in FY22 while its losses surged to Rs 40.3 crore in FY23. On a quarterly basis, its revenue from operations grew 17.6% to Rs 45.36 crore in Q4 of FY23 whereas its losses shrank 10% to Rs 9.83 crore during the said quarter.