Quikr all set to acquire Commonfloor
Both the e-commerce firms have a common investor in Tiger Global which is consolidating its investments in the online real estate sector
Other details, such as whether Commonfloor founders Sumit Jain, Vikas Malpani and Lalit Mangal will get board seats in Quikr, are still being ironed out. Photo: AFP
Bengaluru: Online classified portal Quikr India Pvt. Ltd is in the final stage of discussions to buy real estate portal Commonfloor.com in a share-swap deal, three people familiar with the matter said, as one of their common and large investors -Tiger Global Management LLC - consolidates its investments in the online real estate sector.
The exact ratio of share-exchange is still not clear.
However, both companies are still negotiating over the valuation, which is expected to be in the range of $120 million to $200 million, said three people familiar with the discussions.
They declined to be named.
Commonfloor, owned by maxHeap Technologies, in January raised an undisclosed amount from Google Inc.’s venture arm Google Capital in a deal that valued the company at around $200 million, according to the people quoted above.
The other investor in Commonfloor is Accel Partners.
Several media reports had over the last one month pegged the value of the deal anywhere between $50 million and $160 million. “Both companies are currently finalizing the commercial terms of the agreement and an integration plan,” said one of the persons.
Other details, such as whether Commonfloor founders Sumit Jain, Vikas Malpani and Lalit Mangal will get board seats in Quikr, are still being ironed out. “It has been agreed in principle that the Commonfloor founders will get both equity and a board seat in Quikr. There will also be a two-year lock-in,” said another person quoted above.
Tiger Global, which has over the past one year invested in scores of big and small Indian start-ups, is currently in the process of pulling back from big-ticket investments, signalling a correction in India’s start-up funding market. Such a move may, over time, impact several of its portfolio companies.
For instance, its reluctance to back a large funding round in Commonfloor would inhibit other later-stage investors such as hedge funds, strategics and mutual funds from participating in those deals.
Tiger Global is re-allocating its investments to stronger companies in its portfolio, including Quikr which is in process of realigning its business, creating new business verticals across real estate, automobiles and jobs, among others.
Valued at $1 billion, Quikr, founded in 2008 by Pranay Chulet, has thus far raised about $346 million from investors such as Investment AB Kinnevik, Tiger Global, Steadview Capital Management and Matrix Partners India, among others.
Commonfloor, founded in 2007, has so far raised more than $60 million from Accel Partners, Tiger Global and Google Capital over multiple rounds.
Commonfloor has been in the market for some time to raise $200 million, but with its largest investor unwilling to bring in fresh capital, it has not been able to close the round.
The online real estate sector, which at one point saw high-profile investors such as Japan’s SoftBank Corp. and Google Capital take bets, has in the past few months seen a lull, partly due to a slowdown in the spate of funding to start-ups in India which started early last year.
According to some investors, the sector saw a churn after SoftBank-backed Housing.com, owned by Locon Solutions Pvt., Ltd raised large amount of capital and invested heavily in marketing and advertising, pushing other companies to follow suit.
Housing’s advertising blitz came at a time when the real estate sector in India hit a trough as most homebuyers held back their investments amid rising prices and an uncertain economic recovery.
The drama that unfolded at Housing earlier this year, which led to the ouster of its founder and chief executive Rahul Yadav, has worsened investor sentiment in the sector.
Housing has since been struggling, and has shut down some parts of its business and laid off some of its staff.
- by Dhanya Ann Thoppil
Source:- LiveMint
- by Dhanya Ann Thoppil
Source:- LiveMint
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