CHASED FROM THEIR VANDALISED OFFICE,NoBroker IS NOW ON MISSION TO MAKE PROPERTY DEALERS REDUNDANT

An important Article By Chhavi Tyagi, ECONOMICTIMES.COM | Updated: Mar 20, 2017, 01.00 PM IST

NoBroker does not need to conduct elaborate market surveys before finalising expansion plans. They just enter the cities where they receive the most threats from.

Calling his startup a disruptive real estate platform, Founder & CEO of NoBroker Amit Kumar Agarwal says proof of this disruption lies in the threats and legal notices they receive almost on a daily basis.

"We keep getting threatening calls or legal notices from brokers, and we consider that as one of the biggest indicators of a prospective market. We believe that if there are such goons functioning in a market, the customers must be really hassled. So, the stronger the broker is in a market, the better we consider the opportunity," says Agarwal.

Disrupted but not dispirited 

This belief came at a cost. The head office of NoBroker situated in Bengaluru was vandalised and its employees injured in September 2015 by a gang of property agents who considered the startup a big threat. The startup was forced to shift its office after continued harassment and intimidation. 

"We were completely unprepared for that attack. Even when we transferred our furniture and other things to the new office, a few brokers chased our trucks to discover the new location and we had to take a long route to lose them," relates Agarwal. 

The startup now operates out of a new location which the founders take extreme care to keep off Google maps. This impact, says Agarwal, has come after a concerted effort of three years - an effort to ensure that NoBroker does not become another online listing platform for brokers. 

"The online companies have certainly made the search for a broker easier, but it has not translated in the saving of even a single penny for the customer so what's the point of it all? The demand for a brokerage free platform was there but why was nobody doing it," is the question Agarwal says he asked himself. 

The answer, he admits, lay in the difficulty of building a customer-to-customer website. 

Changing the game

Online real estate portals came with the promise of leaving brokers behind, but ended up becoming the online faces of the agents, and the community pages on social networking groups were also quickly pervaded by the dealers looking for the customers who wanted to escape their net.

"The real reason is that it is difficult to build a customer-to-customer website. It is easier to build a website for brokers to post properties. After that, you only need tenants to come and click on those properties and then you can start charging the brokers, raise funding and become bigger companies. To build a Shaadi.com or Facebook.com, you need both the parties to come on the platform. It took us two to three years to get both the owners and the tenants to come on NoBroker," explains Agarwal.

NoBroker allows an owner to post their property for free and charges the one interested in buying or renting that property only if they need more than nine contacts. Beyond nine contacts the person looking to buy or rent a property needs to pay Rs. 1000. 

"We charge the customer upfront and never at the time of the transaction because the moment you do that you become a low cost broker. But, once I take money up front I will keep sending you good leads and never push you towards  a higher ticket size. You may save Rs 1 lakh or Rs 1,000 as brokerage, we do not really care. Why should we charge more if you save more," asks Agarwal. 

On an average, a month's rent value is charged as brokerage by a broker - from both the owner and the tenant. Agarwal estimates the overall brokerage paid in the top 25 cities of the country to be close to a whopping Rs 30,000 crore. "And this," says a vexed Agarwal, "is claimed by these brokers only to give the phone numbers of one party to another. This information was somewhere out there available with societies' groups but there was no platform to access it," says Agarwal. 

The company offers the service of an assistant for a higher price tag of Rs 1,999 who then takes care of finding you a suitable home by short listing according to your requirements. 

The customers are only too happy to pay. "This charge is only 5-10% of the commission that a broker charges and the service you get is much better. It is a big pain to find a house in Bengaluru without brokers and the brokers only end up exploiting you. I was very happy with NoBroker's services and have even recommended it to my friends," says Rishabh Bajaj, who used NoBroker to find a house in Bengaluru. 

Currently, 75% of NoBroker's revenue is generated from customers, and the rest 25% from advertisements, legal documentation fee and home store assistance. 

Not just a website, but an ecosystem 

However, Agarwal is in the process of building an entire ecosystem based on the needs of a person moving to a new place. While DTH providers and furniture sellers and re sellers are already advertising on NoBroker, commissions from collaborating with packers and movers, facilitating rental agreements, home services and, such is the way forward. 

"Most websites do not offer rental agreement services. There are many such customer feedback we got which we have translated into additional offerings," says Agarwal. 

The focus on generating revenue was an important focus for the startup in the last year which is why, says Agarwal, the expansion has been slow in coming. Launched last month in Gurgaon (after being operational in Mumbai, Bengaluru, Pune and Chennai), the goal is now to penetrate the broker-saturated markets of Noida, Delhi, Kolkata, Hyderabad and Ahmedabad this year. This expansion comes on the back of raising Rs 135 crore so far from SAIF Partners and Fulcrum Ventures. 

"The type of problem which NoBroker is solving has a widespread appeal. It aims to remove the inter mediation-cost inefficiency which has a huge latent demand. Since the revenue playbook and product is ready, the only key thing for NoBroker is to consistently execute and keep scaling up. There would be some challenges, like the attack on their office by brokers, but unfortunately that is the cost of doing disruption in the market," says SAIF Partners, Principal, Mayank Khanduja who is also a board member of NoBroker. 

Apart from driving brokers out of the Indian cities, the startup is also testing international markets. The founders launched a pilot in Philippines and received a good response. "In the next two years, if we can cover top 10-20 cities in India we will expand to some South East Asian markets. Or, maybe even the US and the UK depending on whichever market is still available," reveals Agarwal. 

Threatened, harassed and attacked by brokers, NoBroker founders are on a mission to drive the lazy brokers out of the market and provide a brokerage-free option to those desperately seeking it.

"Our prediction is good brokers will survive because of those customers who do not mind paying brokerage for efficient assistance. But, the entire ecosystem of lazy brokers who have only come in for making quick money will be driven out," predicts Agarwal, who has plans to make his startup the force behind this change.