Anyone who has lived in Mumbai knows that house hunting is a time-consuming and difficult task. IIT Bombay graduates Altaf Ahmed, Sushant Kumar, Ayush Agarwal, Sudhanshu Mishra and Vishal Chauthmal faced just this problem in the city.
“We knew that the process required a lot of effort, time and money. While we were working, we started researching more on the problem. We spoke to a lot of real estate industry people, including developers, and realised the problem stems from the supply side,” says 26-year-old Ayush.
They realised that owners have a huge headache renting houses out. Given the nature of real estate in India, many people hold multiple properties that they don’t let out because of the hassle. Ayush adds that the census 2011 data says five lakh houses out of 30 lakh were found empty.
Altaf has worked with KPMG as a management consultant for two years; Sushant has worked with Bank Of America for a year and freelanced for a few startups in UI/UX; and Ayush has worked with Deutsche Bank for a year.
The group of friends started discussing the idea with their network and Azuro was born. An owner-focused service in residential real estate, Azuro solves the problem by managing across the lifecycle of the property.
The platform finds tenants, takes care of maintenance and tenant issues, performs periodic inspections, furnishes as required and even provides house insurance. In effect, the owner only has to liaise with Azuro. The venture uses technology with standardised processes to ensure transparency at each step and information on the go for everyone.
“The challenge was convincing the owners we met that we have the ability to work in such an unorganised industry,” says Ayush.
The early employees on the tech side were Vrunda and Siddhesh. They interned with the team and soon came on board. “Yaseen is our first sales associate and had worked in a real estate firm. When we told him the idea, he immediately jumped on board,” says Ayush.
Standing apart from the competition
Azuro is active in Central Mumbai and is expanding across different areas of the city.
Speaking of their differentiator, Ayush says:
We are owner-centric. We care about bringing those unused houses to the rental market. Given our owner focus, we can do omni-channel sales on the tenant side. We sell from our website, we work with brokers and we list on real estate classifieds. This makes our fill rate one of the best in the industry. Our competitors are focused on the tenant side and sell only through their website. This limits their ability in terms of fill rate. We charge owners a monthly fee that is linked to the rent they get.
Funding and market
The team has raised a seed round from Kae Capital, White Unicorn Ventures and Mumbai Angels. Sasha Mirchandani, an investor, says property rental is a huge market in India unfortunately crippled with inefficiencies.
“We think a full stack solution like Azuro is a model very well suited to crack this massive problem. We are happy to partner with the Azuro team in their journey to figure out the solution for the same.”
While the Housing debacle might have created quite a ripple and raised questions regarding the sector, the Indian real estate market is expected to touch $180 billion by 2020. The housing sector alone contributes five to six percent to the country’s Gross Domestic Product (GDP). However, there are not many solutions in the market that are actively tapping the potential of commercial properties.
By September 2015, the real estate sector had raised $1.2 billion from private equity investors. Moreover, the construction development sector in India has scooped up foreign direct investment of $24.1 billion between April 2000 and June 2015.
Other players include PurpleYo and Pin Click. Rohit Chokhani, Principal Founder, White Unicorn Ventures, one of the investors in Azuro, believes renting is cheaper than buying. In fact, an individual renting a house for 30 years will still be paying only one-third of the actual ownership cost in the current interest rate structure.