How this Mumbai-based proptech startup is guaranteeing customers home sales

Many Indian home sellers often complain of very stressful and poor experiences while looking for potential buyers. Homeowners say that the market doesn’t offer predictability around price and time when it comes to selling a home. 

“They also have to deal with multiple touchpoints across a fragmented agent market and the overall lack of trust and transparency. These issues affect the resale market, which home sellers often find to be far less fluid than expected,” Shubhankar Dongre, Co-founder of Zapkey, tells YourStory.

Keeping the issues in mind, Shubhankar, Sandeep Reddy and Raja Seetharaman realised the need for a platform that is built on a foundation of trust, transparency and predictability, and provides a unified and high-quality experience to sellers.

“Zapkey heavily relies on data to provide trust, predictability and a top-quality experience to sellers that, in turn, brings liquidity to the resale homes market,” says Shubhankar.

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Founded in 2020, Zapkey is a home sale guarantee platform that claims to provide its customers with guaranteed home sales within three months of the listing date, or they buy the property themselves. Their pricing is driven by proprietary algorithms which track 30 lakh+ property registration records, thereby claiming to ensure a fair market price and transparency in sales.

The Mumbai-based proptech startup began providing easy online access to publicly available, authentic home registration data; thereby empowering its customers to make smart and informed decisions. 

Getting started 

According to Shubhankar, “Sandeep, Raja and I have been co-founders together since our first proptech venture called Propstack, which is a B2B real estate and mortgages data subscription platform. We’ve been in Indian proptech sector together for over a decade now. We’ve been observing the resale home space for Zapkey through the data lens for a few years, and decided to execute the moment we found a product-market fit.

The team is almost 30 members strong now. 

“The biggest challenge in starting up was finding the perfect people. Alignment, excitement for the vision, belief in what we’re doing, and wanting to be part of the success and failures along the way – passionate people are what we needed,” he adds.

How it works

When a home seller approaches the startup, Zapkey makes an initial price based on the details provided, combined with proprietary data using Zapkey’s digitised valuation mechanism. If accepted by the seller, the startup schedules a home inspection visit and makes a final concrete price offer basis adjustments. Once accepted, Zapkey signs an MoU with the seller and begins marketing the home systematically. 

As part of its SOP (standard operating procedure) to build a great experience for buyers, Zapkey creates a repository of all home-related documents ready for review, paints, and cleans the home where required and even uses smart locks to enable comfortable and convenient home visit scheduling.

“The seller receives regular updates on the status of the home sale process and need not worry about putting any other effort into it. Zapkey simply charges a standard market fee upon a successful sale. The entire process is managed on Zapkey’s proprietary operating system,” Shubhankar adds.

The USP

Zapkey’s USP is its data engine and proprietary OS on which it manages the entire operation. 

“Normal property brokers do not guarantee home sales. That’s the biggest difference. They do not have the resources to do so, nor do they have them to provide a quality platform experience. But they are essential components of the operation and aligned to Zapkey’s mission by bringing them into the fold,” Shubhankar adds.

Started with an initial investment of Rs 25 lakh, the proptech startup raised $2 million in seed funding this month. The round was led by Gruhas Proptech with participation from the DLF Family Office, Blume Founders Fund, the Alkem Labs Family, Aprameya Radhakrishna (Co-founder, Koo), Srini Sriniwasan (MD, Kotak Investment Advisors), and other individual investors. The startup intends to use this funding to strengthen its technology and operations teams.

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The way ahead

In India, secondary real estate purchase is preferred over purchase from the primary market as it is cost and time effective and, most importantly, there are no delays in possession. As per a forecast by Grant Thornton, in just the top seven cities of India (Bengaluru, Chennai, Delhi-NCR, Mumbai, Pune, Kolkata, and Hyderabad), the secondary real estate market in India is over $30 billion.

Data clearly showed that in 2017-18, about 72 percent of transactions in Delhi-NCR were concluded in the secondary segment, while only 28 percent were concluded in the primary segment, which clearly exhibits weak consumer sentiments towards the primary sale. On the other hand, cities like Bengaluru, Chennai and Hyderabad recorded on average 72 percent of primary transactions, while Mumbai, Pune and Kolkata showed almost an equal distribution. 

Zapkey’s home guarantee model started in January 2022, with a target of 100 homes in six months. 

“We are on course to achieving that target,” says Shubhankar.

“Once we hit our 100 home guarantee target in Thane in six months, we plan to parallelly expand to other markets in Pune and Bengaluru. In the next 12 months, the target will be to guarantee and sell homes for at least 1,000 homes/home sellers across our markets of operation. We’re targeting a fundraise in six months to support our expansion plans. Our target group is primarily the sub $500,000 apartment largely based on best availability of data which is our lifeblood, economy of scale and sale velocity,” he adds.

The startup is working with over 250 select local brokers in the Thane micro market. Its monetisation model is a standard two percent fee on successful home sales from sellers and similarly from direct buyers. 

“Going forward, we will get into margin expansion with our home loan and home upgrade offerings which will take the margin profile up to 7-10 percent,” he sys.

From an Indian perspective, Shubhankar says there is no Indian company operating with such a model. “It’s a space that requires focus and maybe somebody well capitalised like NoBroker could think about,” he adds.

Globally, funded startups like Opendoor, Clickalia and Loft have operated on such a model when it comes to reselling homes.