Real estate portal commonfloor to merge with quikr
The most awaited news in the on-line Indian real estate sector has been the much awaited merger and acquisition of on-line classified website Quikr and real estate portal commonfloor. On-line classifieds website Quikr that was earlier believed to be interested in buying real estate portal housing, is now looking to takeover in Bangalore based real estate firm Commonfloor for over $50 Million, as reported by Economic times. Three people who are familiar with the ongoing negotiations, have given some estimates of the numbers involved with the pay-out estimated to be worth about Rs 330 crore rupees. Commonfloor is seen as one of the pioneers of the on-line real estate scene of India. If completed, the merger will bring an end to the independent ambitions of commonfloor , which is involved MaxHeap Technologies and caused 57 million $, seven rounds of investors, such as Tiger Global, Accel India and the capital of Google, according to VCCEdge data acquisition platform VCCircle.
Quikr is a classified website competing with OLX. Its main categories are cars, real estate, jobs, household electronics and goods. It recently started a quikr jobs platform to cater to blue-collar and entry level white-collar job seekers, with already 2.5 Million active candidate profiles and 1.6 Million jobs listed on the platform. Started in 2008 by Pranay Chulet and Jiby Thomas, Quikr was originally started as Kijiji India, later changed its name to quikr. It is among the first, start-ups valued at $Bn dollar. It has received investments from Tiger Global, Warburg Pincus, Steadview Capital and Norwest Venture Partners. Earlier this year, in April it had secured $150Mn funding from existing investor Tiger Global and eBay and fresh investment from Steadview Capital. It is a wholly owned subsidiary of Quikr Mauritius Holding.
Also read : Buying a flat in Naigaon
Commonfloor is one of the major real estate portals in India. Commonfloor competes with major online portals is real estate buying selling space like Housing.com, Makaan.com, Indiaproperty, Magicbricks, 99Acres and more.It was founded in the same year as the company it is now being merged with and is seen as one of the most successful start-ups in India. It recently acquired a chat platform Bakfy. Under this, the team joins the acquirer as Entrepreneurs-In-Residence and will work directly with the founders. Quikr too has similar instant chat platform, QuikrNxt that lets users chat or share something with everyone without revealing name.
CommonFloor was reported to be suffering losses to the extend of 47 crores and has been looking to raise funds even before this deal got under way with Quikr considering its cash burn rate has been high. According to filings with Registrar of Companies done by maxHeap Technologies, the parent of CommonFloor had cash reserves of about Rs 220 crore as of March 31. Its revenues at the end of 2014-15 were about Rs 45 crore while its expenses totalled nearly Rs132 crore, leading to a loss of about Rs 87 crore.
This means the company spent about Rs11 crore a month on average in 2014-15. It also had liabilities of about Rs 24 crore at the end of March 2015, which included aboutRs12 crore of trade payables. The money that Quikr will raise will be used to expand the reach of both the brands separately and grow the business. According to the CommonFloor website it lists over five lakh active property listings spread across 200 cities.
But sources say CNBC-TV18, pressure could compel Common Floor investors to accept lower valuations in the sale, reports CNBC-TV18 Priya Sheth.
Sources say the agreement could at approximately $ 120-150 million, were somewhat lower than Common Flooring gladly appreciated. This is because we know that investors are pushing for the sale to go through as quickly as possible.
Sources say that Tiger Global, which is a common investor in both companies are leading on-line discussions.
In recent months, things have not looked Common Floor as the company has struggled to raise funds and new investors on board.
While the contours of the deal, including stocks and cash component, still in development, we learn that the agreement with the Common Floor Quikr publish integrated house.
Quikr A spokesman said the company is to strengthen its focus on markets such as C2C, cars, real estate, jobs and services.
But this agreement, and therefore Quikr Common Floor said they did not want to comment on market speculation.
While the management of CommonFloor is looking for an external investor, and resisting the Quikr deal, investors have pushed for an acquisition which is now in the due diligence stage,” said one source.
The contours of the deal, including whether CommonFloor will operate as a subsidiary of Quikr are still being worked out.
ET could not independently verify the value of the ongoing deal. Quikr CEO Pranay Chulet did not reply to emails, calls or texts at the time of the report.