BANGALORE: Online real estate portal CommonFloor has raised Rs 64 crore in its fourth round from existing investors Tiger Global and Accel Partners. Last July, the Bangalore-based company had raised about $7.5 million (over Rs 45 crore) from the same investors.
Sumit Jain, co-founder and chief executive officer of CommonFloor, confirmed the investment. "We are continually scaling up technology, product and operations and felt it was the right time to further invest in these areas," said Jain, 28.
While the company did not disclose the valuation it received, investment bankers said online services companies can command high valuations if they become a preferred site for customers. For instance, when online restaurant discovery portal Zomato raised over 220 crore last year, it was valued at over 1,000 crore.
"Companies in online services that have established their brand like Zomato, BookMyShow and CommonFloor are able to attract multiple rounds of finding because they have become very popular among customers. That is the key," said Raja Lahiri, a partner at financial advisory firm Grant Thornton India.
Venture investors have begun the New Year with a flurry of investment activity. Earlier this week, accommodation listing site Grabhouse raised seed funding from India Quotient and an angel investor. The same week saw Sequoia Capital leading a $13-million (about 80 crore) investment in online financial services firm BankBazaar.
Fan merchandise site Bluegape, supply chain services firm ThinkLink Supply Chain Services, local language software solution provider LinguaNext and digital media technology company SureWaves MediaTech are some of the other firms that raised funding.
Jain and his IIT-Rourkee classmate founded CommonFloor in 2007 along with another friend Vikas Malpani, an alumnus of Visvesvaraya Technological University.
While individual users can list advertisements for buying, selling and renting of property for free, the company earns revenues from builders and brokers who pay a fee.
"The market is large and growing and there is space for multiple players," said Jain, who is also investing in data analysis to provide research reports to users.
The online property listing market is now dominated by players like MagicBricks, 99Acres and CommonFloor. New companies like Housing and FirstGhar have also been launched in the past two years. It is estimated that the real estate market in the country will reach $180 billion (over Rs 11 lakh crore) by 2020.
In just residential property, the top eight Indian cities will see an additional demand of 2.8 million units in the next five years, according to property consultant Cushman & Wakefield. Subrata Mitra, partner at Accel Partners, said the investment was a result of the potential shown by CommonFloor and the market.