[EXCLUSIVE] Housing in talks to merge with real estate advisory firm Square Yards
After many months of frenzied speculation about Snapdeal buying out Housing.com, the Softbank funded real-estate platform seems to have found a partner in real estate advisory firm Square Yards. According to two sources with direct knowledge of the discussions said Housing’s board has given the nod to merge company with Mumbai-based Square Yards. "The announcement will be made in a few weeks from now," said one of the sources.
“We deny any such rumours,” says Tanuj Shori, CEO and Co-founder ofSquare Yards. Operational in eight countries, Square Yards offers services like property identification, transactional support with site visits, inventory negotiations and distress sales support.
Housing too has denied the talks, "This is absolutely untrue and false, we are not in talks with Square Yards for any kind of deal," the company said in an email statement.
However, YourStory's sources said that the combined entity is likely to continue with the ‘Housing’ brand name.
Founded in January 2014 Squareyards secured $6 million in pre Series A funding from a clutch of investors in Singapore and Hong Kong. Housing has so far raised over $115 million in risk capital from Softbank, Nexus Ventures, Falcon Edge and Helion Ventures. The company raised Rs 100 crore from Softbank in January this year. There were numerous rumours of discussions betweenn Housing and Snapdeal until April. However, the talks seem to have stalled.
“Housing and Square Yards both fired several employees recently to avoid multiple employees for same profile/function,” said one of the two sources. Last week, Housing laid off handful of remaining employees from Delhi office while Square Yards confirmed the layoffs in an email statement to YourStory. "We typically lay off ~5-8% of workforce on non performance issues every quarter - we believe its a healthy churn that is needed in any retail sales organisation...we laid off ~50 out of 1,200 strong workforce over last couple of weeks. Parallely, we are continuously hiring ~100 people every month and that is continuing even this month," the company said in a statement.
According to a source, who is directly involved with Housing, the company needs funding soon. "Housing will run out of capital soon. A merger is only way forward," said the person, who spoke on condition of anonymity due to the sensitive nature of the information.
Launched in 2012, Housing has been in news for all wrong reasons especially due to the controversies caused by its erstwhile CEO Rahul Yadav. Since Rahul's ignominious exit from the company last July, Housing has been trying to get its act together. It changed its focus to sale of homes compared to rentals and also cut down its employee base in an attempt to curb spends.
The merger makes sense for both companies. Square Yard’s major chunk of business happens via offline mode, driven by strong community of brokers while Housing is primarily an online platform to generate leads from property buyers. Hence, each complements the other.
Facilitating transaction is the only way to to make money in real-estate space. Besides strengthening tech capabilities of Sqaure Yards, Housing can also bring massive scale to the joint venture. The combined entity will have similarity to massively popular Chinese real-estate portal - SoFun.