 "Dhruv Agarwala")
While venture capital investments in Indian technology start-ups are now common, the system is increasingly attracting the attention of multinational companies. After acquisitions of Indian start-ups by some global majors like Facebook and Yahoo!, Rupert Murdoch's News Corporation announced an investment of $30 million in Noida-based real estate website PropTiger.com. It was founded by Dhruv Agarwala and Kartik Varma, classmates at Harvard Business School, along with Prashan Agarwal, an alumnus of Indian Institute of Technology,Kanpur. Dhruv Agarwala spoke to Itika Sharma Punit and Anita Babu about why his team chose the crowded real estate website space and News Corp over a regular VC as an investor. Edited excerpts:
How many institutional funding rounds did you get before the latest one?
We have, in total, raised $7 million so far. We do not segregate rounds or call these Series A, B, etc, as the numberings sometimes have different connotations. Basically, we raised some money initially from small angels (angel investors, meaning persons or entities providing financial backing for small start-ups). And, then, got institutional investors -- SAIF Partners, Accel Partners and Horizen Ventures.
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When we started, companies such as 99acres, magicbricks, etc, were already operating. They were trying to solve the same problem, of improving the quality of real estate hunting. There was also Housing.com, which was adding a little more value for the customer. However, we realised that only identifying a property wasn't enough. The process of buying a property and closing a transaction is very cumbersome and required more transparency. We wanted customers to consummate a transaction where data is self-sourced.
How did the three co-founders come together?
Kartik and I went to Harvard Business School together in 2002. After returning, we started a business in 2006 called iTrust Financial Advisors. During that time, we realised real estate was a large part of the investment portfolio and a goal many aspired to have. After we sold iTrust to Karvy in 2011, we decided real estate was an area in which we could do as a standalone business. We started PropTiger.com. We knew Prashan (Agarwal) since 2009 when he was at Allcheckdeals and used to give us leads on home loans.
How do you plan to utilise the funds you have just raised?
We plan to invest these in enhancing our technology capabilities, to improve process gaps in the sales process. Also, we will invest in hiring quality talent to raise the bar of our teams. A part of the investment will also go towards increasing of brand awareness and footprint to other cities. We currently have about 500 people and offices in eight cities.
Why did you choose News Corp over a VC fund?
We have got some fantastic VCs in our company who have added a lot of value for us. But we were very attracted to News Corp's experience in the space. They invested in a real estate portal in Australia at a time when that company was around the same size as we are now and they have nurtured that into becoming a multi-billion dollar company. Also, News Corp now holds investment in Move in the US. I think there will be a lot of learning from these two companies and their experiences in their markets can be applied to India.
What do you think attracted News Corp towards you, when there are several options in the market?
I think it was the quality of our management team and how we have created a differentiated offering in a rather crowded space. I think our mission of making the real estate transaction hassle-free and transparent is also what attracted them.
