SoftBank’s Son Cedes to Murdoch as Top India Home Portals Merge
(Bloomberg) -- Indian real-estate websites PropTiger.com and Housing.com are merging to create the country’s top portal for residential listings and property services, as Rupert Murdoch’s News Corp. boosts its investment in the growing sector while Masayoshi Son’s SoftBank Group Corp. scales back.
REA Group Ltd., an Australian real-estate company controlled by News Corp., is putting $50 million into the new joint entity, while a SoftBank-owned affiliate is investing $5 million. PropTiger co-founder and Chief Executive Officer Dhruv Agarwala will continue to lead the merged businesses.
The deal also ends a painful chapter for SoftBank. The Japanese company had backed Housing.com with $100 million starting in 2014, only to find itself caught up in a public spat with the startup’s CEO, who was later dismissed by the board. The combined entity will continue to be called PropTiger, and brings together real-estate brokerage services and home listings. India is projected to be the third-largest real estate market in the world by 2030, the companies said in a statement.
“This type of consolidation is very unsurprising and fits into the background story of down rounds and scarce capital,” said Sanchit Vir Gogia, founder and CEO of Greyhound Knowledge Group.
PropTiger is an online brokerage that has handled more than $1.5 billion in transactions since it was founded in 2011. Housing.com is India’s biggest housing portal, with more than 4 million visitors each month. Representatives from News Corp, REA Group and SoftBank will join the board of the new entity.
“With 1.2 billion people and a rapidly growing economy and middle class, India’s future as a real estate powerhouse is exceptionally bright, and we’re proud to be a part of this expanding sector,” Robert Thomson, CEO of News Corp., said in the statement. “Clearly there is a compelling commercial purpose to the deal, but we also firmly believe in providing transparency, analysis and insight so that all Indian families, regardless of traditional background or means, will have a better understanding of the property market.”
Son, as well as other SoftBank executive, have indicated that they will continue to back the company’s top investments in India: ride-hailing company Ola, web retailer Snapdeal and online hotel startup OYO Rooms. But that could mean lesser resources and bandwidth for the host of other e-commerce bets that the group has made in India.
In total, Housing.com com raised about $160 million from investors, including additional rounds from SoftBank. The relationship was tense from the start, with co-founder and former CEO Rahul Yadav accusing his investors of unspecified misdemeanors. Before he was dismissed in mid-2015, Yadav also openly rebuked Housing.com’s directors, mocked fellow entrepreneurs and also resigned from the startup and then retracted his resignation. Housing.com’s reputation never quite recovered, although the new leadership team boosted its audience to 4.1 million and increased listings to 630,000 from 110,000.
Yadav, reached for comment on the deal, said: “Home buying is going through rough times in India so I don’t know what Housing.com was doing recently. It’s been a series of wrong steps for what was once the hottest startup in the country.”