BENGALURU/MUMBAI: After aprolonged search for a buyer, troubled online realty portal
Housing
has been sold to rival
PropTiger
in an all-stock deal. The combined entity will get a fresh capital infusion of $50 million from Australia’s REA Group, while Housing’s existing investor
SoftBank
will put $5 million, the companies said on Tuesday in a prepared statement.
REA Group, a global online real estate advertising company, is majority-owned by
News Corp
Australia, a subsidiary of News Corp. TOI reported in its January 9 edition that PropTiger was close to buying Housing and an announcement was on the anvil this week. The merger will create one of the largest online real estate companies in India, offering a full-stack online-to-offline (O2O) services proposition, the statement said.
The combined valuation of the two companies is $250 million, sources close to the development said, adding that Housing was valued at $70-80 million. The Rupert Murdoch-owned NewsCorp will now hold around 40% stake, including the REA Group ownership, in the new entity.
Housing’s peak valuation stood at $220-250 million at the end of 2014 when it had raised $90 million led by Soft-Bank. The investment outcome in Housing is a complete washout for early investors like Nexus Venture Partners, Helion Venture Partners as well as for SoftBank after Housing racked up over $130 million since starting operations in 2012. None of these funds will come off with a significant holding in the newly formed entity and are likely to write off their investment in the once-celebrated startup.
Seen as a disruptive house-hunting portal because of its technology backbone and heavy focus on data and analytics, Housing emerged as the new kid on the block, taking on the likes of 99acres, and
MagicBricks
(part of the Times Group which publishes this paper). The Mumbai based company was touted as one of the buzziest tech startups in India. Co-founded by a dozen IIT-Bombay graduates, it went on a downward slide ever since its CEO Rahul Yadav hit headlines in 2015 for a very public kerfuffle with his investors, damaging the company’s reputation and eventually leading to his unceremonious exit.
Dhruv Agarwala, co-founder and CEO of PropTiger, will continue to serve as chief executive of the joint entity while Jason Kothari, CEO of Housing, who was brought in following the sacking of Yadav, will act as an adviser till next month.
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