News Corp has recently upped its stake in India's PropTiger while the company itself has recently acquired Out of Box Interaction and Makaan.com. In an interview with BusinessLine, News Corp’s Senior VP (Strategy), Raju Narisetti outlines the company’s roadmap for India.
Here is the interview ...
Why is News Corp suddenly interested in the digital real estate space in India?
Digital real estate has been a part of News Corp’s portfolio. We own a significant share in Australia’s digital real estate company REA and through that we own assets in several countries. We also acquired Move Inc and a stake in PropTiger. So it is reinforcing our real estate portfolio.
A lot of revenue used to be with the media companies. Most media companies sat around and did not really see where the revenues were going. And then they all became digital transactional businesses. A lot of companies were discovering that it is important to have transactions built around content. We are good at digital and at content; also we are good at monetising them. The only thing missing was the transaction capabilities. So these acquisitions in digital real estate completed that one missing link. In the long-term we see huge opportunity in a place like India.
Are you looking at a large chunk of revenue coming from the digital real estate space?
Our current portfolio is diversified with media, education, couponing, and social media. Most people associate us with the media business. Only about 4 to 5, out of a dozen odd businesses, is in media. Over time, more of our revenue will come from businesses that are not necessarily in advertising-led or media.
What is the roadmap for a platform like PropTiger?
While the realty market is in a bit of slump because of oversupply, high interest rate and the general economic scenario in India, in the long term there will be a huge a demand for new homes in India, with about 5 million homes required by people. So fundamentally, there is a demand. As a strategic investor, we believe the journey for real estate purchases will begin online and eventually the digital medium will be required to finish the transaction. PropTiger has end-to-end offerings. We have a listings business as PropTiger recently acquired Makaan. We work with developers to expose people to inventory there. We also hand-hold developers to close transactions.
News Corp has invested about $30 million in PropTiger. Is there an ambition to scale it up or even look at other acquisitions in the space?
We just scaled it up by increasing our stake by five per cent. On further acquisition, if it reinforces our proposition, then yes we will look at it. Adjacent acquisitions in the listing space or data is something we are looking at.
Are you focused only on the digital real estate space or are you also looking at other categories like apparels, food and grocery?
We are a strategic, long-term financial investor. We are not looking to merely invest and exit like PEs, hedge-funds or VCs. We have [the] financial ability to write a big cheque. But we should be able to bring more to the table. We look at a few things before zeroing in on an acquisition. First of all, a scalable business model; second is a management that wants to build the company, three is looking for things where News Corp can add synergies, for example using our expertise in news and information; in user experience and to bring a lot of global audience. We look for adjacencies (in the case of acquisitions). In India, we own VC Circle. It fits well with our profile as we can monetise content.
Are you laying more emphasis on the digital space as revenues from print are coming down?
Globally, we are a $8.6 billion company. We have about two billion in cash.
We are entering new businesses not because our existing businesses are doing badly. In India, we could disagree on the pace, but going forward a lot of people will be living their life in the digital world so you want to play into those spaces. Digital is a huge part of what we have done even at Wall Street Journal, where a large chunk of subscription comes from digital. We have done it for all our news properties. At Harper Collins, we have a big book business on digital. We have a big coupon company on digital; our education company Amplify is all-digital. This isn’t new for us. It is an extension of the reality that the world will move digital.
What is the kind of revenue you are looking from the digital space?
Not particularly high from the Indian operations as opportunity is relatively small. VC Circle is a small business and PropTiger is a start-up. They will grow but even in a couple of years it will still be relatively small. It’s not really about the revenue play for us.
Any plans to get Move Inc. or iProperty or similar such real estate entities to India?
The broker category is unregulated. Once the broker segment gets regulated, we may look at it. You have to be a funnel for people’s information needs. When their needs are met, they will consummate the transaction.
Do you have an investment corpus for India?
There is nothing like an ‘x’ number of deals to be done or ‘x’ amount of money to be invested. It is very opportunistic. Over the last six months, News Corp has acquired various companies. Real estate and data and information category are interesting for us.
On any given week, we get about 7-10 incoming requests for investments. We evaluate and decide fairly quickly.