Consolidation in real estate: Quikr and CommonFloor merge to kill Housing

CommonFloor co-founder Sumit Jain and Quikr co-founder Pranay Chulet announcing the merger.

Little birdies have been whispering this news for some time now. Finally, it’s confirmed. Major property portal CommonFloor will merge with Quikr, India’s answer to classifieds sites like Craigslist and OLX.

It’s now a formidable rival for other major tech players in this space like SoftBank-backed Housing.

The announcement of the merger today – no financial terms are revealed – made it clear that CommonFloor will co-exist alongside Quickr’s own property portal, which is called QuikrHomes. The modalities of integration are yet to be worked out, but both the brands will continue even as the two companies merge. They will start working together from tomorrow, said Pranay Chulet and Sumit Jain, co-founders of Quikr and CommonFloor, at a press conference in Bangalore.

The QuikrHomes-CommonFloor combination is a formidable rival for other major tech players in this space like SoftBank-backed Housing and Newscorp-backed PropTiger. “The combined two million property listing makes us clear leaders,” declared Pranay.

Housing had a string of acquisitions last year, even as it struggled to put its house in order after the sacking of founder-CEO Rahul Yadav. PropTiger meanwhile strengthened its position by acquiring its older rival Makaan.

Quikr is one of the best-funded startups in India. It has so far raised US$346 million from 10 investors, including Tiger Global, Matrix Partners, Warburg Pincus, and Norwest Venture Partners (NVP). The company, founded in Mumbai by Pranay Chulet and Jiby Thomas, started as a classifieds portal in Mumbai and then shifted its base to Bangalore in December 2014. It entered high value verticals like automobiles (QuikrCars) and real estate (QuikrHomes) last year after a whopping US$150 million funding round. Late last year, it acquired two real estate startups Realty Compass and Indian Realty Exchange even as the big deal with eight-year-old CommonFloor was on the anvil.

Community connection

Bangalore-based CommonFloor was founded by techies Sumit Jain, Lalit Mangal, and Vikas Malpani in December 2007. It grew into one of the leaders in the online real estate market in India, raising close to US$63 million in funding, mostly from three marquee investors: Accel Partners, Google Capital, and Tiger Global.

CommonFloor was only the second startup in India to get backing from Google Capital. What set it apart was that it began as an online space for apartment dwellers to resolve problems. This community connect gives it a more intimate relationship with its users than most other real estate portals – a strength that QuikrHomes will now try to leverage as it expands quickly across India.

The merger brings the curtain down on one of the major startup stories of Bangalore. Many had expected CommonFloor to go all the way to an IPO on its own, but market dynamics dictated otherwise.

See: What makes this Indian real estate portal uncommon

Consolidation amid a cooling in real estate

The Indian real estate market saw a correction last year following excessive investments into projects as economic sentiment improved after the 2014 election brought in a new government. Consultancy firm Knight Frank pointed to a marked slowdown in the sector in 2015, with homes remaining unsold as supply exceeded demand in several major cities. This had ripple effects on real estate agents as well as property portals.