PropTiger.com and Housing.com, two of India’s leading online real estate service providers, today announced they will come together to become India’s largest online real estate services company.
As part of the transaction, REA Group Limited (ASX: REA) will invest US$50 million in the joint entity with an affiliate of SoftBank Group Corp, investing US$5 million.
News Corp (NASDAQ: NWS, NWSA) (ASX: NWS, NWSLV) remains the largest shareholder of PropTiger, and also owns 61.6% of REA Group. Representatives of REA and SoftBank will join the board of the joint entity, which will continue to be chaired by a News Corp representative.
Henry Ruiz, Chief Digital Officer, REA Group, Simon Barnett, Sales Director, News Corp and Jonathan Bullock, MD, SoftBank Group International will join Raju Narisetti (chair), Ravi Adusumalli from SAIF Partners and Prashanth Prakash from Accel Partners as investor directors on the board of the joint entity.
Dhruv Agarwala, co-founder and CEO of PropTiger, will serve as CEO of the joint entity. Jason Kothari, CEO of Housing.com, who has skillfully steered the company and strengthened the brand among Indian internet users, has decided to move on to pursue other opportunities in the Indian Internet space. He will continue to be an advisor to the joint entity through the end of February, 2017.
The joint entity will draw on strengths of PropTiger, Housing.com and Makaan.com to offer a unique holistic experience to consumers, real estate developments, brokers and homeowners. PropTiger is the largest online residential real estate brokerage firm, having completed transactions worth $1.5 billion since its founding in 2011, while Housing.com is India’s most popular online platform for buying and selling homes, receiving over four million visits every month.
The joint entity will be the only player in India offering the full range of online and offline services in the real estate space, such as personalised search, virtual viewing, site visits, legal and financial diligence, negotiations, property registration, home loans and post- sales service.
By 2030, India is expected to be the third largest real estate market in the world with the sector contributing to over 15% of national GDP. The joint PropTiger-Housing.com entity is exceptionally well positioned to win the digital real estate market in India with its unique capabilities and a strong set of institutional investors, which also include SAIF Partners, Accel Partners and Nexus Venture Partners.
Commenting on the investment, REA Group CEO, Tracy Fellows said, “India is an important part of our international growth strategy. We believe in the potential of the Indian real estate market. REA invests in companies that are leaders in their markets. The joint entity will have access to REA Group’s expertise and know-how from its operations across the globe.”
News Corp Chief Executive, Robert Thomson welcomed the development saying, “Our investments in PropTiger, REA Group and Move, Inc. are testimony to our faith in the potential of the global digital real estate market, of which we are now the largest player. With 1.2 billion people and a rapidly growing economy and middle class, India’s future as a real estate powerhouse is exceptionally bright, and we’re proud to be part of this expanding sector. Clearly there is a compelling commercial purpose to the deal, but we also firmly believe in providing transparency, analysis and insight so that all Indian families, regardless of traditional background or means, will have a better understanding of the property market.”
SoftBank Group International MD, Jonathan Bullock said, “Housing is very well established as an online real estate platform brand and we have been working with the management team to create strong execution capabilities to offer full stack services under one umbrella. PropTiger has already created a great transaction engine. We have full confidence in the management team and will continue to support them. We would particularly like to thank Jason for his leadership and wish him well for his future endeavor.”
The union will immediately strengthen PropTiger’s full stack Online-to-Offline (O2O) services proposition. In April, 2015, PropTiger acquired online classifieds platform Makaan.com to launch India’s first O2O platform, aiding consumers throughout their home buying journey, from initial search and discovery to the final step of transaction closure.
Speaking on the partnership, Dhruv Agarwala, Co-founder & CEO of PropTiger said, “We are excited to join hands with Housing.com. The deal is a continuation of our efforts to bring best in class services to consumers and create a unified technology driven platform that is capable of serving all needs of consumers, developers and brokers with respect to buying selling and renting of homes. Housing has established itself as a formidable online brand and we admire its consumer centric product innovation. The timing of this deal is just right.”
Jason Kothari, CEO of Housing.com, added, “I am proud of the exceptional progress the Housing team and investors have achieved together in the past 18 months. Housing.com’s partnership with PropTiger is the next transformational step to realise our vision of becoming a full-service online-to-offline real estate services company. Housing.com and PropTiger share similar values - to provide trust, transparency and simplicity to the home buying journey. The joint entity will be well-positioned to establish market leadership in a large and rapidly changing marketplace. As I move on to my next opportunity, I am glad to leave behind a strong foundation.”
Another major highlight of the deal is the strategic investment by REA Group in the combined entity. REA is the leading digital real estate company in Australia and in February 2016, acquired control of Southeast Asia’s digital real estate company iProperty, which leads the industry in Malaysia and has a significant presence in Hong Kong, Indonesia and Thailand. REA also owns a significant stake in Move, Inc., which was acquired by News Corp in November, 2014. Move operates realtor.com, which has since become the second largest digital real estate company in the US.
The new investment in the PropTiger-Housing.com combination is another step in REA Group’s strategy, along with News Corp, to become market leaders in Asia.