Housejoy CEO explains why the startup got into the $15B home construction business
In this video interview with YourStory, Housejoy CEO Saran Chatterjee and new COO Sanchit Gaurav talk about scaling their home construction startup from 200 homes a month in Bengaluru at present to more in other cities.
Over the last two years, home services startup Housejoy was looking at business lines that could scale quickly. Housejoy started with the premise of using tech to solve the gap in the market for reliable and qualified service providers in over 15 categories. It did so and served 2 million customers so far in five cities.
Then the startup looked into home renovation and began delivering at least 20 homes a month in early 2018.
But then a chance meeting with Sanchit Gaurav—a real estate businessman—led Housejoy CEO Saran Chatterjee to understand that more than a lakh people were buying land in Bengaluru every year to construct homes.
“This is when we realised that we had to get into this segment, which is a wide, untouched space,” he says.
He, therefore, brought in Sanchit as Co-founder and COO in March 2018, and began to incorporate the new business line in the startup. The playbook was simple: house construction is still run by unorganised players who don’t bring any transparency in pricing and time schedule, and HouseJoy could productise the approach to building a home.
Watch the exclusive video interview with Saran and Sanchit to understand their strategy towards home construction
A one-stop shop
So, what does Housejoy solve in the space?
Think a one-stop shop for home construction - from plan approval to handover - where the customer need not worry about the licences required to construct a home, nor getting the water and electricity running. Housejoy is taking care of other requirements as well, like the borewell, carpentry, interiors, to get a house up and running.
The firm also helps owners avail of loans to construct the house.
HouseJoy has a team of contractors and site supervisors. It currently has Bengaluru as its main base of operations for home construction. It will soon be available in Delhi, Chennai, Pune, Mysuru, and Hyderabad for the same.
At present, the startup has 150 houses in execution. Signing up is easy, the founders say.
“All the customer has to do is get onto the Housejoy website and order from the four packages according to their needs. We have packages that are Rs 1,600 per sqft, Rs 2,200 per sqft, Rs 2,400 per sqft, and Rs 2,600 per sqft,” Sanchit says.
He explains that the house will be completed in less than six months once the orders have been made on Housejoy.
“Our team will inspect the site, check the documents, and then begin the construction,” he adds. Each house is built at an average cost of Rs 60 lakh. If Housejoy clocks it right then it can net Rs 220 crore per year.
Of all the services offered by Housejoy, the home construction business is a high-margin one.
“It is a $30billion business. I would have not thought of home construction, but Sanchit presented the opportunities to me in terms of strategy and execution. I realised that this has a greater service-level agreement with higher expectations from the customer. Imagine the customer now tracks and manages the construction of the house from the app itself,” says Saran.
Housejoy has over 50 bookings a month in Bengaluru alone.
But home construction is not an easy category. One of the first movers in this business was a startup called BuildInn, which bootstrapped its way to more than $200,000 in revenue.
Unfortunately, it had to shelve its operations because it could not scale beyond Bengaluru. Another startup, 100Pillars, is now scaling up in Bengaluru.
“The services business is a scale business. In construction business, we may not touch as many people, but it is a high-value business,’’ says Saran.
HouseJoy has raised a total of $30.3 million and is backed by Matrix, Amazon, and Vertex Ventures.
(Edited by Evelyn Ratnakumar)