India's Business Standard reports troubled real estate platform Housing.com only has enough cash for a few more months, with CEO Jason Kothari back in the market looking for a new investment.
The report says Housing.com currently spends Rs 10.05 crore but only brings in Rs 1.2-1.5 crore a month.
According to the Business Standard Kothari has approached a few strategic investors looking to raise capital in a few months, but he nevertheless maintained the company is stable and not in "urgent need" as suggested by the online newspaper's sources.
Contrary to the claim, developments at Housing.com over the last eight months suggest the company is anything but stable.
In particular it recently announced plans to move offline with the hire of a large team of its own brokers expected within the next two years.
In May, a further 400 staff were asked to leave following a business restructure late the previous year in which the company decided to focus its business on home buying and selling only with 700 staff losing their jobs.
Housing.com then shut its rent category in January following an investment of $15 million from Softbank even though, according to the Business Standard report, rent brought in "a million listings and eight million hits".
The company currently gets less than four million unique hits, the online newspaper adds.
While the rental category cost the company less than Rs 2 crore, Kothari argued there was a need to bring focus to the business model with the sale of apartments on Housing.com.
The Business Standard suggests, perhaps due to pressure from an investor, Housing.com decided to evolve into a transaction-led model. But, there were no transactions to do, Kothari admits.
“The easiest transactions to do would have been rentals. But, that was shut down,’’ an executive told the newspaper .
But Kothari explained: “No one in the world is using renting as a transactional model online and we would need to make innovations never made before.”
At the time the decision to close the rental platform was made last year, Kothari asserted the strategy was about Housing's revenue position in the future.
“We are now focusing on just buying and selling residential property – that’s the biggest business in real estate, about 80 per cent of all deals,” he said.
Last November the company also resolved to monetize its products as part of its restructuring exercise with Kothari pointing to Housing.com's series of digital advertising products for developers and brokers expected to provide maximum customer exposure and return on investment for their home sales efforts.
In addition, the company is offering customized digital marketing services to large developers to drive home sales and build developer brand equity.
Kothari told the Business Standard Housing may make acquisitions to kickstart the sales model, but no suitable target has yet been identified.
Despite all of this, Housing.com still aims to make $10 million (Rs 67 crore) in this financial year and be profitable in 18 months.
Kothari says the company will not measure its revenue in gross merchandise value and that it is on its way to hit the mark. "Even our board thought it was ambitious, but we will get there."
The Business Standard hints Snapdeal may make an offer to acquire the company in an all-stock deal but Housing.com has regularly rebuffed Snapdeal takeover talks.