 "Why investors are ignoring Housing CEO's outburst")
Yadav, who resigned from the CEO's post on April 30 after writing a scathing email to investors questioning their intellectual capabilities, apologised and withdrew his resignation on May 5, a day after his resignation letter became public. Of course, this wasn't the first time Yadav had got into a kerfuffle.
Read more from our special coverage on "RAHUL YADAV"
In March, Yadav got into a public spat with Shailendra Singh, managing director of Sequoia Capital, over employee poaching. He sent him a mail, saying: "I just came to know that you personally are after Housing's employees and are brainwashing them to open some stupid incubation. If you don't stop messing around with me, directly or even indirectly, I will vacate the best of your firm." In reply, Singh said that Sequoia had only offered an analyst's position to one Housing.com employee.
For all his indiscretions, investors are in a forgive-and-forget mode. "Housing.com is a brilliant product. So far the co-founders have done very well. A few bad instances or decisions do not decide the fate of a company. Yadav has been asked to work on his communication skills," says an investor in the company who does not want to be named.
Investors covet the product for changing the way Indians hunt for homes. That is why they have pumped in over $121 million in four rounds of funding so far. Venture capitalists now hold nearly 70 per cent in the company, the chief among them being Nexus Venture Partners, Helion Venture Partners, Falconedge and Haresh Chawla, former group chief executive officer of Network18 and Viacom18 Media, and Zishaan Hayath, co-founder of Chaupaati Bazaar, a phone commerce company.
Housing.com maintains that it has been able to meet most of its targets so far. "The real estate demand-supply engine we made is now working like a Ferrari," says Advitiya Sharma, co-founder and chief marketing officer, Housing.com. The company is today working with 10,000 builders, 30,000 realty brokers and 250,000 landlords. It says that in the past two quarters, the number of listings on its website has gone up 10 times -from 500 per day to 5,000 (listing means the number of properties listed or displayed on the website).
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In the next couple of quarters, it plans to increase the listings to 10,000 to 12,000 per day. "So we are looking at massive growth from the supply point of view," says Sharma. "There is huge growth happening in all segments. The number of unique daily visitors to our website peaked at 400,000 and we average 250,000 per day. This means we have crossed the industry average of 150,000 visitors." The company, currently in 55 cities, also plans to expand to 100-150 cities in the next few quarters.
Alexa Rankings, which tracks Internet traffic and ranks websites, recently put Housing.com at the 147th position among websites visited by people in India, below rivals 99acres at 138th place and MagicBricks at 139. MagicBricks is a real-estate broker site owned by Times Internet. 99acres.com is owned by Info Edge (India).
However, Housing.com disputes the rankings, saying its data collection is superior to its competition's. "We have a very professional service in place," says Sharma. "You won't find fake listings with us. When a seller lists with us, our executives go to his house to collect all relevant data and pictures, which are then uploaded on the website." He also explains that the bounce rate, which represents the percentage of users who enter a site but leave without further interaction, is the most advantageous for Housing.com at less than 20 per cent.
Plans for improvement
The company is already working on improving its bouquet of services, which makes Yadav indispensable. It plans to offer services in interior designing, furnishing and moving and packing. It recently added a home loan segment to its services and says it has already processed around 1,000 loans so far. The home loan market is pegged at Rs 20,000 crore, and the site says it has already tied up with 20 major banks that give home loans. "We have integrated our home loan product with the back-end of banks, so we can customise a loan for a user," says Sharma.
In March, the company had a nation-wide brand launch, revealing its new logo and brand philosophy that comes with the tagline of "Look Up". The brand was extensively advertised in national newspapers and hoardings in several cities and on social networks. Sharma says that in nearly three years of its existence, Housing.com has not advertised or marketed itself. Despite that it has been able to garner 80,000-100,000 visitors.
The start-up has spent Rs 75-100 crore on advertising so far and there are concerns of cash burn, but Sharma reassures "from a funds perspective we are healthy. Besides, interest from investors in Southeast Asia and the US keep pouring in."
Keen to become the foremost property portal, Housing.com acquired Indian Real Estate Forum last month for around Rs 8 crore in order to improve the availability and accessibility of independent information for home buyers. The Indian Real Estate Forum is a real-estate community in which registered users exchange information, experiences and views on real estate projects, builders and other property related topics. It currently has 150,000 subscribers. Housing.com plans to revamp the forum, bringing in more analytics and features based on analytics to make it "more addictive" for members.
For the year ended March 2014, Locon Solutions, which owns Housing.com, reported a loss of Rs 49 crore on revenues of Rs 1.9 crore. Expenses included employee salaries of Rs 20 crore and advertising expense of Rs 14 crore. The company has 1,557 employees across 55 cities.
For revenues, the company uses a subscription-based model for landlords, brokers or builders to list on the site. Besides, for every transaction on sales or services like home loans, it charges a basic fee. "Earning revenue from this industry is not a big deal," says Sharma. "I don't doubt our capacity to earn revenues. We will start focusing on clocking revenues soon." With such a confident outlook on its future, why wouldn't investors forgive the outbursts of the company's chief executive?