Only 10 days old, 2017 is already turning out to be an eventful year for the Indian startup community.
A day after the massive change of guard at e-commerce major Flipkart, two prominent online real estate portals, News Corp-backed PropTiger and SoftBank-backed Housing.com, have announced plans to merge.
The two will now form what they say will be “India’s largest online real estate services company.” As part of the transaction, News Corp’s REA Group will invest $50 million in the merged entity and a SoftBank Group company will put $5 million in the same.
The new company will be headed by PropTiger co-founder and CEO Dhruv Agarwala, while Housing.com CEO Jason Kothari will move out by the end of February.
For Housing.com, the merger comes at a time when most of its founders have left the company. Among them was Rahul Yadav, enfant terrible of India’s startup ecosystem. In July 2015, Yadav was unceremoniously voted out as CEO following frequent tussles with the board of directors.
On Jan. 10, as news of the merger broke, Yadav spoke to Quartz about the deal and what it means for Housing.com and its 12 founders.
What do you think of Housing.com’s merger with PropTiger?
I think Housing.com will soon shut down. All the excellent talent that it had has already left and those who remained are looking for better opportunities. Traffic has already eroded and, soon, brand Housing.com will die. Long back, we never even considered PropTiger among our competitors because we were far better than them. Even now, I don’t understand how the merger will be useful to Housing.com.
So where did it all go wrong for Housing.com?
We wanted to focus on scaling up our business before focussing on revenue. The real estate business requires an incredible amount of patience and the market was bad, too. But the board and investors felt the focus needed to shift on revenues sooner and that is where it all started to go down. They would not understand the business.
Is this the end of a dream for the 12 IIT graduates who wanted to change the Indian housing sector?
In 2015, when I had come out of Housing.com, it was the hottest startup in the country with the best talent, technology and over $50 million in cash.
The company had all the ingredients and resources for great success. We had initially focussed on rentals. The margins may be low there, but that was the business that was bringing in volumes. But the board and investors felt that buying and selling were the low-hanging fruits and we should focus on them. By shutting down rentals, 80% of the business was killed.
What is your next move?
Still figuring it out.
Quartz was unable to verify his claims at the time of publishing this interview.