How online classified platform Quikr turned around by buying 16 start-ups

Brings in greater synergies across its verticals as it continues to cut losses, improve top line

When online classified platform Quikr acquired eight start-ups in 2016, it resembled a Lego ensemble made of different coloured blocks. Its losses were the highest in 2015-16 financial year (FY16), shooting over Rs 500 crore, while revenue remained under one-tenth of the number.

Since then, the Bengaluru-based start-up has stayed head down, stitching up different verticals and teams together as it built out synergies across the board.

In FY18, Quikr’s revenue of Rs 173 crore was double from the year before and losses of Rs 233 crore were Rs 100 crore lower, according to figures shared by the company.

“What has worked in the acquisitions is we acquired great monetising engines, and married them to our demand and supply,” said Pranay Chulet, founder and chief executive officer of Quikr. These added units now contribute 50 per cent to the company’s revenue.

Chulet said FY16 was also a period of high investment into the business. Ever since, the cost has come down and revenue gone up, he said.

The improvement in key numbers should be seen in respect of the brazen inorganic expansion, the company has had. Throughout the years, Quikr has acquired 16 start-ups, entered verticals such as real estate discovery, home services, jobs listings, and has swelled to a 2,800-member company.

Quikr’s service lines are largely built on top of acqui-hires. It forayed into realty through the acquisition of CommonFloor.com for $200 million, the company’s biggest till date. Other units such as HDFC Red and HDFC Realty were added in 2017. 

The online classified platform added home services segment after taking over Zimmber in 2017, while the jobs segment was stitched together through the acquisitions of Hiree (2016) and Babajob (2017). 

In order to make these possible, Quikr has raised about $350 million in venture capital since 2008, when it started out. Prominent investors include Matrix, Tiger, Warburg Pincus, Norwest Venture Partners, and Omidyar Network.

Having built deep expertise in verticals, Quikr has a three-prong strategy laid out for itself, said Chulet. By focusing on transactions, it is moving away from an ad-led money where the company earned from paid listings and passing on leads to the sellers.

“Our belief is that in India, you can create a much larger business by going closer to transactions. Online advertising market is relatively small,” says Chulet. “We are in the middle of (enabling online) transactions in cars, motorcycles, pre-owned goods such as phones and TVs and furniture. In services, the money goes through us.”

By offering a “set of services like guarantee that the product is of good quality, arranging financing for the buyers, inspection reports, some sort of warranty” is the pull Quikr has created for user to transact on its platform rather than offline. 

On cross-selling, Chulet is of the opinion that if a customer is looking for a rented accommodation, he may be interested in a pre-owned motorcycle, or looking for a job in the city. This underlines the premise of the different verticals Quikr has chosen to add to its kitty.   

The company recently launched a loyalty rewards programme QCash, native points a user gets from using Quikr services. “Of every 100 QCash, Rs 60 are spent on categories other than where they have earned the QCash,” which shows the thesis is working, said Chulet.