NoBroker takes on brokers’ lobby in Pune
13 Oct 2016
After courting trouble with the strong brokers’ lobby in Bengaluru, NoBroker.in, a platform in India that helps people find rental accommodation without the help of real estate agents, has now expanded its presence to Pune, reported Economic Times.
The start-up presently has an office in three cities – Bengaluru, Mumbai and Chennai. In the two years since its inception, NoBroker claims to have saved its users around Rs 21 crore (210 million rupees, or $3.1 million U.S.) in brokerage charges. This broker-free model so upset estate agents, that earlier this year NoBroker’s Bengaluru office was allegedly ransacked by unidentified goons.
A broker’s union, the Confederation of Real Estate Brokers’ Association (CREBA), representing around 20,000 broker-members, petitioned the Competition Commission of India (CCI) against NoBroker, and four other classified sites (Housing.com, Magicbricks.com, 99acres.com and Commonfloor.com), but it was struck down, as reported by us in February this year.
The main allegation was that these websites monopolize the real estate brokering business with their no brokerage policy as a consequence of which traditional brokers lose business.
Brokers in India usually charge two percent of the value of the property. “That is a wast of money, as the broker does not add any value to the transaction. Aspects like title verification are nowhere as costly as is often claimed by brokers. We will offer our platform for free to flat-owners, while potential buyers can search for free till their allotted nine contacts are exhausted,” says Amit Agarwal, CEO and one of the founders of NoBroker, reported Economic Times.
The start-up’s revenue comes from value-added services.
“If a customer pays to have additional contacts beyond the nine free ones, we will put them in touch with one of our executives who can help in the search. We also have comprehensive title-verification for the property, as we have tied up with law firms and accountants, available at various prices on our app or website.
“Also, we have tied up with various other start-ups, which help in setting up the apartment, in terms of housekeeping or furnishing,” said Akhil Gupta, NoBroker’s chief technology officer. (See AIM report here on NoBroker’s tie-up with a furniture rental company Furlenco).
The popularity of NoBroker’s alternative peer-to-peer model can be gauged from the fact that its monthly traffic (visits to desktop and mobile sites) is 1.3 million (source: SimilarWeb).
Founded by Amit Agarwal and Akhil Gupta, NoBroker’s existing investors include India Quotient, Sequoia Capital, Kalaari Capital. Last month NoBroker landed $10 million in B-series funds from Singapore-based venture capital firm BeeNext, Digital Garage, Beenos, Qualgro, Mamoru Taniya of Asuka Holdings, and existing investor SAIF Partners (See AIM report here).