Can NoBroker create a flywheel effect?

Proptech startup NoBroker faced persistent questions about its business strategies on the road to the coveted $1-billion valuation.

Early on, during the Series A funding round in 2015, investors asked why they should bankroll its online platform for buying, selling and renting property, co-founder and CEO Amit Kumar Agarwal recounted. In the Series B phase, they wondered if users would pay a subscription-like fee to get faster results matching their exact requirements.

And when the Bengaluru-based company began providing home services such as cleaning, painting and repairs, investors asked if it would be able to ramp up this play along the lines of the realty platform.

Queries cropped up at every stage as the company devised new business offerings. But no one raised doubts about its approach at the most recent funding round in November 2021, when it became India’s first proptech unicorn, Agarwal told The CapTable. The company insists the $210 million it secured from existing backers General Atlantic and Tiger Global Management and new investors like Moore Strategic Ventures reflects their faith in its execution abilities.

There is some truth to this. NoBroker tackled a long-running problem in the property market — the outsized involvement of overcharging and pushy brokers — and became a trusted, tech-driven link between homeowners, buyers and tenants, who earlier contended with take-it-or-leave-it choices. Its decision to not seek brokerage proved to be a bold and popular move.

The company has not limited its ambitions, developing new verticals every two years since its inception in 2014. These allied services account for half of its income, and the hope is they will help create a flywheel effect, which is various business parts clicking together to add users and build growth momentum. 

But with these gambits, there is additional pressure on NoBroker to generate higher revenues, outrun competitors in multiple markets and approach profitability. It will be particularly tested in the area of society management, over three years after launching the NoBrokerHood app. MyGate is the dominant player in this space, which has gained attention in the wake of the pandemic.

16 Years, 1 Unicorn

Classified businesses, including platforms listing properties, were among the earliest proponents of internet-enabled solutions. The journeys of companies such as MagicBricks and 99acres, founded in 2006 and 2005, respectively, can be traced back to the years when mobile and internet penetration had not peaked.