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Business News/ Companies / News Corp buys 25% stake in real estate portal PropTiger.com
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News Corp buys 25% stake in real estate portal PropTiger.com

News Corp. has invested $30 million in Elara Technologies, which owns PropTiger.com

At least 10,000 properties, with a combined value of over $1 billion, have already been bought in India through PropTiger.com, according to the company statement. Premium
At least 10,000 properties, with a combined value of over $1 billion, have already been bought in India through PropTiger.com, according to the company statement.

New Delhi: News Corp., the media and publishing firm owned by Rupert Murdoch, has acquired a 25% stake in the Indian online real estate portal PropTiger.com for $30 million, the company said in a statement late Monday.

After five months of talks, Nasdaq-listed News Corp. decided to invest in Elara Technologies Pte Ltd, which owns PropTiger.com.

The move makes Murdoch the latest entrant into India’s e-commerce space.

The deal comes two months after News Corp. agreed to buy US property company Move Inc. that runs realtor.com for about $950 million.

“It was just a mutual meeting of like minds. We had started the process of raising funds and News Corp. was looking at this space in India," said Dhruv Agarwala, co-founder of PropTiger. The portal’s existing investors Accel Partners and SAIF Partners India also contributed a total of $7 million in the current round, said Agarwala.

As part of the acquisition, Raju Narisetti, senior vice-president, strategy of News Corp., will join Elara’s Singapore-based board, the company said in a statement. Narisetti was editor of Mint from February 2007, when it was launched, to December 2008. Noida-based PropTiger, which was founded in 2011 by Agarwala, Kartik Varma and Prashan Agarwal, expects to use the fresh funds for expanding into new cities, improving its technology platform as it enters the secondary or old property sale market and talent acquisition.

PropTiger, which is currently present in eight cities, will be offering its services in 10 more cities including Hyderabad, Chandigarh, Kochi within next six months. It is currently present in cities such as Noida, Gurgaon, Mumbai, Pune and Bangalore. It plans to expand its business to 25 cities over next two years, said Agarwala.

The Indian online real estate space has recently attracted foreign investor interest with the latest round of funding coming into Mumbai-based Housing.com from Japanese investor SoftBank Corp. On 19 November, Mint reported that Housing.com received about $75 million in fresh capital.

In September, property listing websiteCommonFloor.com raised $30 million from its existing investor American hedge fund Tiger Global Management Llc.

“We are glad to see this recent broader recognition of the ‘digitization’ potential in real-estate among financial investors," said Narisetti. “We are a long-term, strategic partner that likes to help build brands and businesses, unlike financial investors with fixed timeframes and a permanent eye on exits," he added.

PropTiger claims to offer a business model that’s different from what most of its competitors like commonfloor.com, 99acres.com and housing.com, follow.

“A lot of other players are working hard on creating a listing platform and their business model is to earn money on advertising while our business model is to hand-hold the customer through the entire transaction, right from property identification to documentation to the final purchase," said Agarwala.

The company makes money by charging a commission from the real estate developer on the overall value of transaction. The percentage varies from transaction to transaction. “We believe this model is distinct from most of the other broker-listings based real-estate sales models currently in India," said Narisetti in an e-mail response. “We believe in making bets on people behind the business as much as we do on the existing business itself."

PropTiger, which currently employees 500 people, gets close to a million unique visitors on its platform. At least 10,000 properties, with a combined value of over $1 billion, have already been bought in India through PropTiger.com, the company said. The company, which currently does not offer rental services on its platform, said it will eventually look at the space; however the move could be a couple of years away.

“India has more than 270 million Internet users and the number is growing exponentially. There is no doubt that the development of digital is empowering individuals and transforming industries, and we are extremely enthusiastic about the potential for PropTiger.com as the country fulfils its digital destiny," said Robert Thomson, chief executive of News Corp. “PropTiger.com will provide analysis, information and insight so that Indians will be better informed when they make the most significant investment decision any family will make, buying a home," he added.

News Corp also has a 61.6% stake in REA Group Ltd that operates Australian residential property website realestate.com.au. REA also has a substantial stake in iProperty, a leading digital real estate advertising business across South East Asia. “PropTiger.com will benefit from News Corp.’s digital and product expertise, drawing on its experience with REA and Move," the company said in a statement.

“By 2020, Indian residential space will be $160 billion and clearly there is room for more than one player…we have created a unique position for ourselves which we will continue to focus on and continue to drive our marketshare," said Agarwala while commenting on the rising competition in the market.

News Corp already has a presence in India through its Dow Jones, Wall Street Journal and HarperCollins Publishers India Ltd businesses.

News Corp while talking about other upcoming investments in India said it believes in India’s digital future and its investments will not be driven by pure financial considerations. “We will continue to be open to relevant opportunities that are generally in and around our core information, publishing, education, real estate businesses. But News Corp believes in adding value beyond our checkbook so we will evaluate compelling India opportunities on a case-by-case," said Narisetti.

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Published: 25 Nov 2014, 10:59 AM IST
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