 "Real estate")
Online classified portal Quikr on Thursday confirmed the acquisition of real estate portal CommonFloor. With the deal the player deepened its real estate business at a time when investors are wary of cash-burning firms driving consolidation in the Indian start-up space.
The $200-million all-stock deal stitched by Tiger Global, main investor in both Quikr and CommonFloor, becomes the first major consolidation story in 2016.
CommonFloor was founded in 2007 by Sumit Jain, Lalit Mangal and Vikas Malpani. It has raised $63 million in four rounds of funding from Tiger Global, Accel and Google Capital. However, it had been struggling to raise more funds after its previous round a year ago. Investors swapped CommonFloor stocks with that of Quikr.
The merger is expected to be completed over the next two to three months. "We see great synergies between us and CommonFloor. We both believe in creating businesses that are strong on growth, as well as monetisation. We expect this transaction to not only accelerate the growth of QuikrHomes but also our other verticals," said Pranay Chulet, founder and chief executive of Quikr.
"This merger creates a strong industry leader and gives us a very strong platform to grow the business. Our obvious synergies will benefit consumers, property developers, as well as our real estate partners," said Sumit Jain, co-founder and chief executive of CommonFloor.
The deal will improve the vertical play in real estate for Quikr.
Quikr has, in the past few months, been on an acquisition spree. In November, it acquired Indian Realty Exchange (IRX), a mobile-first aggregator of agents and real estate analytics platform RealtyCompass.
IRX tags agents and brokers with real-time projects and locations, and also helps users connect with them to buy and sell property. The investment towards this acquisition is a strategic move that enables Quikr to strengthen its real estate marketplace and recently launched vertical, QuikrHomes.
Chulet, with a valuation of over $1.5 billion, has been looking for acquisitions to strengthen its verticalisation strategy. Quikr has raised $346 million in six rounds from investors such as Tiger Global, Warburg Pincus and Norwest Venture Partners. "If the industry consolidates into businesses consisting of larger players, it's more rational, healthier and creates more value. Our acquisitions are not in areas that we are already present in but in newer categories. We are open to more such deals," Chulet added.
