Online real estate platform Housing.com has initiated discussions with e-commerce company Snapdeal and global media giant News Corp, which also backs rival PropTiger, for a strategic stake sale to get over its financial troubles, according to a report in The Economic Times.
News Corp acquired a 25 per cent stake in Elara, the parent company of PropTiger, for $30 million in November last year and has since then increased its stake to about 30% in the startup.
The development of Housing looking at a stake sale comes at a time when funding for startups is slowing down as investors have started asking portolfio companies for results before pumping in more cash.
Japan’s SoftBank, which is the largest investor in Housing.com, is looking to bring in strategic partners with an aim drive the company’s future growth. If the talks between the parties go through, the deal may get sealed by the second quarter of 2016, the report said.
Housing.com, owned by Locon Solutions Pvt Ltd, was also reportedly in talks with online classifieds portal Quikr in the recent past for the proposed stake sale. The deal between the two, however, did not materialise because of disagreements over terms.
The problems at Housing.com started soon after Japan’s SoftBank led an investment round of $90 million (Rs 540 crore) in the company in November last year. Housing.com was then valued at about Rs 1,500 crore.
The Mumbai-based company lost momentum after the board sacked 26-year-old co-founder and chief executive Rahul Yadav in July this year due to alleged inappropriate behaviour.
Owing to the growing internal problems in the past couple of months, Housing.com has been undergoing a major restructuring drive that has resulted in shedding of business lines and sacking of hundreds of employees. The startup has also dissolved the operating committee set up by investors, and would soon form a new board, ET reported earlier.
The company recently said that it would close all business units including rental and commercial listings and just focus on the home-buying real estate segment to bring in more efficiencies in operations.