[UpClose] How NoBroker.com cracked the real estate market with a total broker ban and an intuitive app
In the startup community, it’s all about USPs (unique selling points). For NoBroker.com, the one factor which makes them stand out in the already over-crowded real estate market is the complete absence of any kind of brokerage. Meaning, an absolute broker ban – a feature that is plugged in with the help of algorithms and other tech tools.
“A broker cannot post his property. A broker cannot fetch an owner’s contact,” says Amit Kumar Agarwal, Co-Founder and CEO, NoBroker.com.
Watch Amit Kumar Agarwal talk about the many hurdles which shaped their success in this episode of UpClose.
“What this results in is a website where you can buy, sell, and rent property without ever contacting a broker,” he adds.
A graduate from the Indian Institute of Technology, Kanpur, and Indian Institute of Management, Ahmedabad, Amit launched the tech-based real estate platform along with fellow IITians Akhil Gupta and Saurabh Garg in 2014. It’s been almost five years since then, and today NoBroker.com boasts of nearly 70 lakh cumulative customers.
Every month, the platform adds around 1.5 lakh new properties to its website, closing around 15,000 properties on a monthly basis. This makes for around thousand crores worth of saving on brokerage per year. The only way to achieve this, says Amit, was by creating a business model where the costs were low.
“If our costs are low, then we can pass that benefit to the customer and they can save money,” he says.
A frugal approach over an aggressive stance
The Bengaluru-based real estate search portal currently operates an end-to-end transaction model in six cities - Mumbai, Bengaluru, Pune, Chennai, Gurugram, and Hyderabad. While the startup has a suite of several value-added services, starting from Rs 999, the platform by default is free.
This means, a better half of its revenue comes from a host of services. Starting with subscription-based services (which contributes to two-thirds of its revenue) to NoBroker Pay (which is the financial offering), and Home Store Services (its one-stop shop for all real estate transactions like loans, packers and movers, legal documentation, etc).
In a bid to provide a broker-free real estate experience, the startup, earlier this year, even forayed into the resale of residential and commercial properties. This was followed by a Series C fundraise to the tune of $51 million, led by General Atlantic, SAIF Partners, and BEENEXT.
And more recently, Nobroker raised another $50 million in Series D round from Tiger Global.
Clearly, the company is now on an expansion mode. Even as it expands and accelerates customer and deal-closure growth, team NoBroker has a markedly unique approach as compared to many other startups in the sector. It is one characterised by a slow and steady growth as opposed to aggressive moves and relentless hustling.
“We have been very frugal from the start,” says Amit. “Even when we raised money and had a good bank balance, we ensured we spent it very carefully. Our focus has not been to grow on vanity metrics, which is mostly about GMVs or getting empty customer registrations,” he adds.
NoBroker’s most aggressive stance, in fact, has been about solving customer problems. Instead of “indiscriminately” opening in newer cities, it has been about narrowing down on one city, one locality, and solving its problems thoroughly.
Perks of a rewarding and intuitive app
Entrepreneurship is all about doing things differently. And who understands this better than Amit and team, who have taken the road less travelled with NoBroker.com.
Instead of targeting metros like Delhi and Kolkata, the real estate platform first set its shop in IT hubs like Bengaluru and Pune. The brains behind NoBroker are also not big on spending on advertising. In fact, a majority of its customers come to the site through word-of-the-mouth promotion.
As Amit says, “Our paid traffic is very less, and this is the traffic we want.” Since theirs is a “repeat business”, Amit explains he would rather have a customer who has experienced the services, is happy with it, and would recommend it to friends and family.
With this approach in mind, the team has also designed an app that is both rewarding and intuitive. For instance, if a customer is looking for a house which is close to their office, and convenient for the family, NoBroker would strive to furnish these details, rather than provide glamorous features, which just look good on the app.
No Broker has also come up with a way to reward people on their platform through their ‘click and earn’ feature. It is basically an option that allows people to click and upload pictures of properties looking for broker-free tenants. In lieu of the property information, the site rewards the one who submits details with Rs 100 through Paytm.
“This is a very popular feature,” reasserts Amit. “We get almost one fourth of our properties through this medium.”
A bite of a trillion-dollar market
A proof to NoBroker’s success in a rather traditional market with disruptive technology, came in 2015. Sadly, it was in the form of an unprecedented attack from the broker mafia. Around 50-60 local brokers and hooligans were alleged to have stormed the online real estate’s office premises in Bengaluru around the time and threatened its employees.
“We had to vacate the office almost overnight and we were not sure where we would go or find an alternate office space,” recalls Amit, adding that in the face of such an incident, their #1 priority was to make sure the website was up and running.
Between then and now, NoBroker has come a long way, upping its security and building a model that enables micro matching of properties, and in the process, increasing property closures. The startup is now eyeing bigger goals as it plans to scale pan India in the next few years.
The real estate market in India is a trillion-dollar opportunity as per an IBEF report, and NoBroker is eyeing a bigger slice of this pie. Of course, there are a bunch of hurdles too that they have to cross along the way, starting with the challenges associated with a C2C model and the after-effects of demonetisation on the buying and selling cycle of properties. But if Amit’s words are any indication, they are all set to take on this market.
After all, people are always going to rent in and rent out. So, in terms of rentals, things remain pretty much unaltered.
As Amit quips, “Property rentals is almost recession proof – and it is the bedrock of our business.”
(Edited by Megha Reddy)