For years and years, real estate space has been dominated by various middlemen and brokers. Even the entry of online players was not able to make any big change to the regime. However, despite the good technology solution offered by some real estate players both offline and online, two biggest customer pain points remained unsolved. First is spurious listings on online websites which leads to imperfect matchmaking and second is the high cost of transaction.
As stated by Mayank Khanduja, Vice President of SAIF Partners, the residential rental brokerage amount globally is $200 Bn per annum. In India, the total rental pool in residential itself is estimated to be $30 Bn and brokerage pool to be $2-4 Bn. Moreover, there are brokers who are even charging upto 18 percent commission due to information asymmetry.
In order to plug these gaps, Amit Agarwal and Akhil Gupta, decided to challenge this inefficiency and came up with NoBroker. The idea was conceptualized in late 2013 and the website was launched in March 2014. Based out of Bangalore, with NoBroker, the founders aim at making house hunting a hassle free and a cost-effective experience.
What it has to offer?
The portal offers smart recommendations based on real-time data – something which an offline broker can provide effectively, thereby helping the customer in making an informed decision.
The site algorithm is designed to keep the broker out of the system. When a new customer registers on its site, the algorithm works in the background and validates the user in around 2 minutes. This helps the team in creating an ecosystem of genuine owners and tenants.
Customers can also create completely customized rental agreements on the site and get them home delivered within 3 working days. As explained by Amit, in Mumbai and Pune markets, the current process of getting agreement registered is very cumbersome. The owner and tenant need to take a day off from work and go to the government office along with a broker to give bio-metric signature. At NoBroker, the user just needs to fill in basic information like name of tenant and landlord, permanent address, security deposit etc. along with the UID (Aadhaar No.). Rest all is managed by the NoBroker team.
Apart from the site, founders have also come up with their mobile app with a unique feature – ‘Click & Earn’, added to it. Not only does it allows customers to surf the site on the go, but earn money as well. All that one has to do is click a photo of a ‘To-Let’ board, send it through the app and get cash awards for every successful listing. An user can earn INR 100/- per verified listing with no upper limit on number of listings.
“This has never been done anywhere before by any online player anywhere in the world. Every day, we are getting 100 to 200 direct owner properties on our website due to this. With Crowdsourcing feature of ‘ Click & Earn’, we have enabled everyone in the city to be a broker- buster,” claimed Akhil.
Current Traction, Monetization and Plans Ahead
The founders claim NoBroker to be the world’s largest ‘Peer-to-Peer’ ecosystem in real estate with 2.5 lakh user base and monthly traffic of 1.2 Mn.
As per Akhil, they are currently helping customers save more than 12 crores of brokerage every month across 4 cities viz. Mumbai, Pune, Bangalore and Chennai. The team also claims to have grown 10 times in the past 3 months across all key dimensions: website visitors, registered users and new property listings.
NoBroker was angel funded by Saurabh Garg (co-founder of Four Fountains De-stress Spa) who also acts as a mentor. Earlier this year, they also raised Series A funding of $3 Mn from SAIF Partners and Fulcrum Ventures. As of now, the services are completely free. However, founders believe that making money in future will not be much difficult looking at the current scenario where customer is already paying a hefty fee for the next best alternative.
“What this marketplace will do is to crash this fee to one tenth. Customers regularly tell us that they will be more than willing to pay this fraction of the fees as long as NoBroker continues to provide them fresh and large pool of house inventory and an ecosystem of genuine tenants and owners,” said Amit.
The initial investment was spent on setting up operations. The team is now focusing on expanding operations to new markets and bringing in innovative marketing initiatives for new customer acquisition. Given the globally common customer pain point and their lean non-offline resource model, NoBroker team finds the portal globally scalable.
The founders further target to maximize their reach and have presence in top 20 cities in the country in coming months. And in the next 3-4 years, they expect to be present in top 100 global cities.
The company, currently, has a team strength of 100+ employees across tech, marketing and sales.
Competition and Challenges
As per the founders, there is no sizeable organized competitor who can match their technology and algorithm of identifying and eliminating brokers. “We are trying to set order in an unorganized sector. Our main competitor is thus, the entire pool of unorganized brokers,” said Akhil.
When asked about the initial challenges, Akhil admits it was difficult to convince people that real estate space can work without brokers. Apparently, even in US, there was not a single player doing it and even all large layers in India used to work with the brokers rather than remove the inefficiency. However, now after having established this huge non brokerage ecosystem of 3 lakh owners and tenants, founders do not find any specific challenge.
“Market is big, customer demand is massive and internet penetration is increasing through mobile. We just need to focus on using technology to solve customer problems and deliver a superlative customer experience,” added Amit.
The online real estate space is already crowded with players at all fronts. Where we have horizontal players like Grabhouse claiming broker free listings, vertical players like OLX and Quikr are also serving people’s needs. But still, in the owner vs broker listing war, broker is still the winner. With NoBroker claiming to have sure-shot validation checks, it would be interesting to watch if we can really get this space broker free.