Kunal Bahl, co-founder of Indian online marketplace Snapdeal, gestures as he addresses the media during news conference in New Delhi, India, July 15, 2015.Reuters
Domestic e-commerce retailer Snapdeal is reportedly negotiating a deal with Housing.com wherein the real estate services portal could be valued at approximately $650-700 million.
Any such transaction — if that takes place — is expected to get finalised in the next two to four months and would benefit both the companies, sources told CNBC-TV18.
Japan’s SoftBank and Nexus Venture Partners may fund the deal. Both SoftBank and Nexus hold stakes in Snapdeal and Housing.com.
Mumbai-based Housing.com has been facing severe challenges for the past few months due to escalating costs and low demand for its services. It has already fired around 800 employees in a series of layoffs carried out to meet the cost reduction targets set by its stakeholders.
It is understood that any probable acquisition or strategic funding will induce much needed stability in the company. On the other hand, Snapdeal could raise its revenue by $10-15 million in the real estate vertical by acquiring the firm.
“We are in NO Talks with anybody for any sale,” said Housing.com in a e-mail sent o IBTimes.
In June last year, online and mobile classifieds portal Quikr was reported to be in talks to acquire Housing.com for Rs 1,100 crore ($175 million).
Founded in 2012, the valuation of Housing.com stood at Rs.1,500 crore ($250 million) during its last round of funding, which saw an investment of $90 million from SoftBank in November 2014. Helion Ventures, Nexus Ventures and Qualcomm Ventures are the other investors in the online real estate service provider. So far, the start-up has raised about $140 million in four rounds of funding.
Its former CEO and co-founder Rahul Yadav had created a fair amount controversy at the company. Yadav had quit the real estate start-up in May 2015, criticising the board members in his resignation letter. Later, he made a U-turn by withdrawing his resignation and apologising to the board.
Moreover, he gave away his entire stake in the company (Rs 150 crore to Rs 200 crore) to Housing.com employees the same month. He also challenged his peers to follow his step. However, some analysts saw this as a “publicity stunt”.
Finally, the company’s board members decided to fire Yadav in July last year, stating “his behaviour is not befitting of a CEO and is detrimental to the company.”