New Delhi-based online marketplace for broker-free rented accommodation, Zocalo.in, has raised funding from a clutch of prominent investors. The round saw the participation from MakeMyTrip & TrulyMadly’s co-founder, Sachin Bhatia; GSF Accelerator & InnerChef founder Rajesh Sawhney.
Other investors who participated in this round of funding are Advantedge Incubators Pvt Ltd, former MD of The Carlyle Group, Mahesh Parasuraman; Udaan Angels and Dheeraj Jain, partner with a prominent UK-based hedge fund.
Founded in 2014 by Uday Lakkar, Zocalo is an online platform for broker-free rented accommodations in India that provides listings for various renting apartments and paying guests accommodations. Company’s USP is that they provide proprietary reviews & rating platform over the PG or rented space to help seekers choose the right neighbourhood and accommodation.
The platform has an inventory of 75,000 PG & hostel beds and more than 10,000 accommodation listings with 6,000 new listings being added every month. The company has its presence across Delhi-NCR and Mumbai as of now and it plans to expand to other cities.
Solving the Maths of renting an Accomodation
There are some drawback that a seeker faces while renting a PG or accommodation. One of them is paying brokerage. People don’t see the value when they pay so much brokerage. It’s like one month brokerage with 11 months contract. So which is 1/11 or 9% on part of 1%. Similarly, on part of property provider, it’s another 1 month of brokerage. So the leakage in the value chain is upto 18%, which is huge. “So when we started while knowing that commonfloor and Housing being already in the space, we found that this is a very strong premise based on which Zocalo could start. Second aspect is the uniqueness of the site that acts as an counterpart to find the right suit for the place that one wants to select.
The softer elements such as the number of times the power is cut off, what is the management and security of the area or probably is it a noise free zone or not or may be things like is there a water clogging in front of my office are also been informed.”
Zocalo is encouraging a marketplace model where it is trying to change the consumer behaviour.
Where, mostly the other players are trying to put in fancy algorithms that talks about some high locality index and lifestyle index, Zocalo looks at softer elements of the residential place just like you have Zomato for food and restaurants and Tripadvisor for Hotels .
One of major challenge for Zocalo has been to understand consumer behaviour. Co-Founder said, “There are two extremities while operating in the space. First, 99acres and MagicBricks – they allow anybody to upload anything without verification. The second extreme is where there is verification for every photograph and listed housing like that of Housing.com. However, in these cases a broker is involved and so the cost gets added on. So, logically the cost gets passed down to someone or the other in the value chain and most likely that is the end consumer. In our case we are trying to simplify the process. We tried to solve the major drawbacks that people feel.”
According to FirstPost, currently 20% households in Mumbai and Delhi-NCR are living in rented homes and is likely to increase in Tier I cities with a population of 20 lakh people or more, like Mumbai, Delhi, Bangalore and Chennai. But other cities like Hyderabad, Pune, Kolkata and smaller towns will see a rise in the trend. Primarily because of urban growth, better facilities across cities and towns, improved employment prospects and better education infrastructure.
The other players in the domain include, Eezyrent with over 20,000 registered customers, Nobroker.in, which raised $3 Mn, Flatchat, that raised $2.5 Mn from CommonFloor and Grabhouse which claims to have served 1 Mn customers and bagged $2.5Mn funding.
Commenting on the competition, Uday Lakkar, Founder at Zocalo.in said, “We differentiate ourselves from other players by involving in depth coverage of accommodations while targeting the huge untapped youth accommodation segment for long stay purpose. We leverage technology heavily to solve the problem of information asymmetry and match-making for the accommodation providers and seekers.”