2024-11-12 13:17:54 :
The Bengaluru-based company reaped a quarter of the gain $NoBroker, which generates revenue of Rs 600 crore from financial services, expects its home loan vertical to become its second-largest business in the next few years after its primary business, said Saurabh Garg, co-founder and chief business officer. Real estate buying and selling business.
“The number of homes we are selling every month is increasing. At the same time, our attachment ratio is also increasing. I believe home loans have the potential to become very big,” Garg said, noting that the vertical is already its largest growth Fast business. The add-on rate reflects the growth in demand for secondary products (home loans) due to demand for primary products (housing). ).
NoBroker’s home loans tripled in fiscal 2024, the company said, declining to disclose specific figures.
The executive expects the country’s home buying cycle to pick up speed over the next 4-5 years, further driving demand for convenient financing options.
He said that the real estate industry is cyclical. After nearly a decade of slow growth, it has now entered a stage of rapid growth. He said there was real demand from buyers and he expected interest rates to fall.
Additionally, Garg said home buying decisions are improving as average rent increases in India exceed annual salary increases, creating challenges for tenants.
In the first half of 2024, the number of home buyers aged 25-35 in the online real estate market increased by 23% year-on-year. Garg told us that these buyers are mainly employed in the private sector and are part of nuclear families. Mint.
“They don’t see property ownership as the biggest milestone, but rather as a means of building wealth and establishing stability early in life,” he added.
Founded in 2014 by Amit Kumar Agarwal, Akhil Gupta and Saurabh Garg, NoBroker entered the coveted unicorn status in November 2021 after raising $210 million in Series E funding from General Atlantic, Tiger Global Management and Moore Strategy Ventures Club, becoming the first real estate startup valued at more than $1 billion.
The startup said it has raised $366 million in funding to date. Its main competitors include MyGate, another Tiger Global portfolio company, and Apna Complex, a unit of real estate services group Anarock.
income diversification
Garg said the need to promote convenient home loan options arose two years ago when buyers struggled to complete transactions due to issues such as lack of knowledge about home financing alternatives.
“Home loans and other financial services are still not fully organized. We have noticed that many of our customers are either not getting loans approved quickly enough or are not aware of the best players for their needs,” Garg explained.
In partnership with banks and non-banking financial companies, NoBroker provides financing options to users after an initial check of proof of income and credit score. For every transaction processed, the startup charges a fee from the bank. NoBroker has partnered with Bank of India, State Bank of India, HDFC, Bajaj Finserv and Kotak Mahindra Bank, among others.
However, rapid growth is not guaranteed. Banks and non-bank financial institutions already have large customer bases and sizable loan books, while smaller players in partnership with banks can only add limited value, said a late-stage investor who did not want to be named.
“It’s a good way to diversify revenue streams, especially since property buying and selling trends can be cyclical. This is typically a thin-margin business, but we’ll have to see how much it can grow,” the person added.
To be sure, other startups, including Magicbricks and 99acres, offer similar services.
However, the idea is to continuously develop new products to take advantage of business opportunities, Garg said. Garg said NoBroker is currently working on a number of experiments, including facilitating short-term financing options for home down payments and offering homeowners insurance so renters don’t have to put down a deposit.
“We are constantly trying new ideas. Once we figure out what works best, it usually takes four to five months to roll it out at scale,” Garg said.
The company’s operating income increased by 87% $Loss of 6.09 billion rupees in fiscal year 2023, losses widened to $Garg said expenses increased by Rs 506 crore due to higher expenses due to launch of new products and expansion of services to more cities.
Although the company has not yet released figures for fiscal 2024, Garg said the company successfully curbed losses and achieved 50% revenue growth during the year, without disclosing specific details.
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