With $5M funding in its kitty, LocalOye aims to become the go-to local services marketplace
LocalOye, a startup which started as a venue-booking service for parties and weddings and pivoted into providing complete local services by turning into a marketplace model has raised $5 million series A funding from Tiger Global Management and Lightspeed Venture Partners. We covered LocalOye back in 2013 when the company was just started by Aditya Rao and Anupam Tulsiyan.
The story behind starting up
Aditya Rao graduated from BITS Pilani and went on to work at Mercedes Benz, which he quit in two months and started a company in the CRM space. After a year of starting up, Aditya decided to join Jombay and worked there for two-and-a- half years. He then quit Jombay and started LocalOye with his friend Anupam as a venue booking service. The service slowly expanded into catering and then moved on to other services. Aditya says,"We were always passionate about the Local Services space since we believe that the current experience of booking services is very tedious and cumbersome. The only way to book services is through classifieds where the customer needs to spend time doing research to find the best service provider. Although we initially focused on venues, we soon realized that venues were only one area which needed to be solved. "
LocalOye currently operates in Mumbai, offering services in 250+ categories; including education (e.g. tutors), home services (e.g. appliance repairs), wellness (e.g. yoga, fitness) and events (e.g. photographers) etc.When a user requires their services, he can log on to the website or post the requirements through the Android app. The platform uses an advanced recommendation engine to connect customers with high-quality service professionals within a few minutes. Once the requirements have been posted, the vendors are notified and the user details like budget, location, timing etc are sent to them. After a service provider accepts the lead, LocalOye connects both the vendor and customer. This way the customer does not have to search or choose from multiple service providers.
The services are free for customers and the startup does not charge listing fee from vendors. They provide a prepaid wallet to vendors and money is deducted only when the vendors are connected with customers. This is very much like a commission-based model. This model makes sure the customers are spared the dilemma of choosing and, they get services only from the best providers .
From the vendor's viewpoint this helps them decide on the customers they want to work with instead of taking on all the leads which come to them. Aditya says,
"We are also very useful to our merchants since we give them 50x better conversion rates. This is because they have control over the kind of customers they would like to work with. Our merchants can decide if a lead is valuable to them based on the customer’s requirement which helps them convert the customers with more ease compared to other competitors and they also have the option to reject the leads which are not relevant."
The LocalOye team does screening and personal verification of each service professional to ensure quality, assurance and fair pricing.
In 2014, LocalOye had raised its initial seed round of funding from some of the top angel investors including Sidharth Rao (Co-founder Webchutney), Haresh Chawla (ex-Group CEO Network 18 and India Value Fund partner), and Sachin Bhatia (co-founder, MakeMyTrip).
The $5 million series A funding from Tiger Global Management and Lightspeed Venture Partners will help LocalOye aggressively scale nationwide and expand to more service categories. Commenting on the fund-raise Aditya said, “People spend money on two things – buying products or services. We want to completely own the services space. Over the past 1.5 years, we have solved some of the toughest local services problems, and now it is time to exponentially build on this momentum by continuing our focus on great execution, merchant quality and customer delight.” In the next few months, LocalOye would be investing heavily in technology and building the team.
At present they claim to have over 3000 vendors in 250+ categories across Mumbai. The company is also looking at expanding to other cities. JustDial is the largest player in this segment but has some differentiations as they have prioritized listing on their platform. Most other players also have a similar model in place. Only time will tell if a commission-based business model will work in the long term .
But Aditya and team seem to be riding high on confidence. Aditya signs off,
We do not want to build another classifieds company. The LocalOye platform is highly interactive and data driven; and this is what makes our engine smarter every day. And we have also seen a huge demand from service professionals for better tools to manage their business.