Six months after online classifieds major Quikr acquired online realty portal CommonFloor, it has shut down Flatchat’s office, a rental flatmate-finding application owned by CommonFloor.
ET reports that Quikr has given employees of Bangalore-based Flatchat an option to join one of its portfolio companies and move geographically, but not all the employees were comfortable with relocation. As per sources, the majority of the people have quit Flatchat and the office has been shut down. Employees were given a month’s notice but no severance package, as per an unnamed employee.
According to employees, there were around 52 people in Flatchat, of which only technology team got absorbed in Quikr. Flatchat, a mobile-based platform that helps students and bachelors find accommodation and flatmates, is said to have a user base of 300K users, including 10K in Singapore where the app was launched in 2015. It had raised $2.5 Mn in funding from CommonFloor last June, after being acquired by it in April 2014.
Gaurav Munjal, ex-co-founder of Flatchat, stated, “Flatchat is not the run-of-the-mill product whose revenue was obvious. It was a lean team making a global product. And the response and traction was huge. I can go to the extent of saying it was one of the most innovative product to come up in the recent times because it removed the need for a broker. You could directly get in touch with the owner or tenant. Start chatting. We saw a huge response and opportunity. When Hemesh and me moved on from Flatchat to start Unacademy we had created a new management which we were confident would take the product to the next level. And had no idea about the acquisition. A few months later when the news of acquisition started floating then we got to know that Quikr would end up merging Flatchat with its chat product Quikr Nxt. The DNA of two companies is very different. One is an Ops heavy revenue focussed company. The other is a lean, small product focussed company.”
The shutdown comes on the back of Quikr’s move to consolidate its assets after the CommonFloor acquisition. As per a company spokesperson, Flatchat is merged with messaging service Quikr Nxt. The startup has increased capacity in its Bangalore office to bring everybody together under one roof and has also taken more office space across India by signing close to seven leases for space in the past couple of months.
Quikr had also shut down the CommonFloor office in May this year as the lease was getting expired in May. Hence employees now work out of Quikr office in Bangalore along with co-founder Sumit Jain.
Quikr bought CommonFloor in a $200 Mn all-stock deal in January to deepen its real estate business, just four months after Quikr launched its own home search business, QuikrHomes. It shut down the CommonFloor office in May. Post the acquisition, in March about 150 employees of CommonFloor were asked to leave the company.
In a letter to CommonFloor employees, at the time of acquisition, Sumit had promised that “don’t worry about your job or role.” But as per employees, this assurance has not been met. Meanwhile as Quikr focuses on profitability, the Flatchat office in Domlur has been put on lease by the property owner.
The developments suggest that the online real estate industry is now witnessing a consolidation trend, following the proliferation of many of them in the last year where investors were pouring money into them. In April last year, digital real estate marketing and transactions services provider PropTiger.com had acquired online property listings and classifieds player, Makaan.com.
Similarly, Real estate advisory Square Yards has acquired three companies since last year -realizing.in this January, Singapore-based real estate advisory firm Luxe Real Estate last June, and Oryden Tech Labs last October. With the slowdown in funding this year, this pace of consolidation is expected to be quicker.
