Accel Partners funded CommonFloor.com, a property portal, got off to a flying start thanks to its online platform for apartment communities. Now, it wants to become a full-service real estate portal and touch revenues of US $25 million in two to three years
Most entrepreneurs believe that the seed for a business idea is planted when they are trying to solve a personal problem. The founders of CommonFloor.com, a property portal, could not agree more. When Sumit Jain moved into his apartment in Bengaluru, he realised that people were living in silos and only got together when there was a problem in their building. He felt the need to build a platform where people could get onto a common floor, literally, and discuss their issues. Hence, in December 2007, he, along with his co-founders, Vikas Malpani and Lalit Mangal, set up CommonFloor.com, a part of maxHeap Technologies, to address the internal needs of apartment owners.
The trio spent the first few years signing up apartment societies as users and building the maintenance platform based on user feedback. Over time, what started as a normal discussion platform, became a complete end-to-end ERP solution for apartments. In 2009, the founders realised that the fabric of conversations on CommonFloor.com was discussion around real estate. People were discussing about property prices, construction status and rental issues. “Many buyers felt the site had information about the society, which could help them find the right property to buy or rent. And, this kind of natural traction, specifically in the real estate sector, was not available in the market,” states Jain. Thus, the property postings by owners, which was earlier available as information to apartment residents, was made open to the public, post owner consent. As a result, owners started getting good responses, and people who were reading this from outside the society could contact the owners directly. “This was a new phenomenon and we became India’s largest platform with listing from owners,” says Jain. Simply put, since the CommonFloor.com has access to all the information from various societies that are using its platform, it provides an interface where people can come and identify properties for purchase or rent.
Today, the company operates on five pillars – equip people with the widest choices, acquire information, get deep insights, offer easy-to-use tools, and adopt innovative technology.
In 2008, the trio moved out of their home office and found a place for themselves, and, in 2009, raised Series-A funding from Accel Partners. The funds were used for hiring people and expanding its services to New Delhi and Mumbai.
In fact, during this phase, CommonFloor.com was still validating its concept. It began by letting property owners list their property (which saw a good response from the buyers). From early 2011, it allowed property dealers to list their property on the platform. Then, it started catering to the resale and retail market. Eventually, once the founders were satisfied with this response, they started letting property developers list their property for the primary market. In late 2011, it became a complete property portal supported by maintenance/community management software. Alongside, it started building its team and is today a 600-member company.
According to the latest comScore (an Internet analytics company providing marketing data and analytics) report for the last three months, the portal has been ranked number one amongst all real estate portals in the country. Commenting on the factors that led to this prognosis, Jain says, “We are trying to map the complete property journey online. We are not trying to become a property portal or beat someone in the market. We have a perspective about the problem and we are trying to solve it.” This apart, the company has proprietary access to properties and data and has built a brand even without advertising. “We are a very effective company as we do not spend money on marketing,” says he.
Working out the finer details
There are no minimum requirements for getting onto CommonFloor.com’s platform. The company provides the software to individual homes and to large apartments. The prerequisites are that there has to be a society or a body, which is responsible for approving and disapproving users, and the society has to be registered with the local authorities.
As far as technology goes, there is a directory and communication platform about the society, to help individuals discuss issues. For the society, one can manage the complete apartment database (like number of residents vs. tenants), post policies of the society, manage accounts, and map data. It also helps manage vendors who have access to the platform. These vendors pay for such services to CommonFloor.com. Talking about the revenue model, Jain says, “We do not charge the societies or individuals. Our revenue is from the property dealers and vendors, who market their property.” This being said, it also offers free listings on the portal. “Invariably, we largely charge the builders who want to advertise their property,” adds Jain.
“The best marketing strategy is to build a product which does not need marketing,” says Jain. Until now, while it has largely relied on word of mouth, going forward, it will be conducting property fairs and doing online marketing. “Though we are an online company, property is an offline affair. People do not buy a property without looking at it,” says Jain. He has started a site visit service, where prospective customers can come to CommonFloor.com, choose the projects they want to visit and the company will, in turn, arrange the visit, free of cost. Today, almost 70 per cent of builders in Bengaluru are advertising with the company. “Earlier, a builder used to allot only four per cent to five per cent of his marketing budget for online activities. Now it has gone up to 10 per cent. We expect it to go to 30 per cent in the next few years,” says Jain. With increased budgets towards online marketing by builders, the company is looking at grabbing a much bigger market share in this segment.
Reaching the next level
Growing at a fast pace, CommonFloor.com is all set to capitalise the billion-dollar opportunity in this industry. In April 2014, it acquired Flat.to, a website that helps students and bachelors find accommodation. “We are focused on fulfilling every possible property information need of users at all stages of the property cycle – search, research, purchase, property management, sale and rent. By acquiring Flat.to we will now be able to cater to a new segment of the property market – students and bachelors. This is a large segment in the online real estate space with a unique set of needs and requires a different focus,” says Jain.
It is also tapping the mobile user market by offering augmented property search in addition to its map-based search. While its strength lies in Bengaluru, this financial year, it is planning to enter 20 more cities. It currently has offices in 18 cities, has listed properties from over 120 cities in its portal.
According to Jain, the factors that drive that growth in this space are Internet usage, urbanisation and increase in earning power. He says, “Typically, a property buyer spends a year before buying a property. Hence, he cannot spend all his 52-weekends searching for property offline.” This is the kind of market he is targeting.
With such strategies in place, CommonFloor.com is aiming to achieve US $25 million revenue in the next two to three years. The company is also moving from apartments to non-gated communities, and is entering Tier 2 cities and Tier 3 cities. In terms of properties, Jain intends to have every property listed on CommonFloor.com. “We want to say that if a property is not available in our portal, it does not exist,” says he on a concluding note.
Founder: Sumit Jain, Lalit Mangal and Vikas Malpani
Year: December 2007
Turnover: Target to achieve US $25 million revenue in two years.
Funding: Rs. 64 crore in Series D funding from Tiger Global and Accel India. Series C funding of US $7.5 million from both Accel Partners and Tiger Global in July 2013, Series B was raised from both Accel and Tiger Global in 2012; Series A funding from Accel Partners in 2009
Add features on technical platform, invest in research, engineering and information (primary and secondary)
Build a team for real estate, groups (has recently rebranded its Apartment Management offering to CommonFloor Groups -where users can find their community and join), and apartment connect or vendor connect, its business unit, which takes care of running an apartment
With one lakh societies registered in portal, leverage businesses which want to advertise in apartments