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Joke of the Year or Not: Quikr in talks to acquire Housing.com for $175 mn

Online classifieds portal Quikr is in talks to buy Housing.com in what will amount to distress sale of the real estate listings startup which has lurched from one controversy to another in the past year.

Online classifieds portal Quikr is in talks to buy Housing.com in what will amount to distress sale of the real estate listings startup which has lurched from one controversy to another in the past year.

The Economic Times reports, citing three sources, that the cash and stock deal could be struck at up to $175 million depending on the stock-cash split. The details are being worked out. During its last round of funding in November, Housing was valued at $250 million. In that round, SoftBank led a $90-million investment in the Mumbai-based company. The Japanese conglomerate is the biggest investor in Housing, and is estimated to have invested $70 million. 

“Right now the deal is 70 per cent in stock; if the stock amount is over 80 per cent then the valuation can increase to $175 million,” one investor in Housing told the Economic Times. In response to a questionnaire from the Economic Times, Housing’s outgoing CEO Rahul Yadav wrote, “Joke of the year.”

“There have been talks (with Quikr), but there are other things to get sorted out first,” one of the sources told the Economic Times, referring to the imminent management overhaul at Housing where Yadav has resigned as CEO. The source cautioned that the deal is yet to reach the final stage of negotiation or financial due diligence. The deal hinges on the outcome of Housing board’s meeting scheduled to be held on Tuesday when investors will seek to remove Yadav as CEO, the source added in the report.

For Quikr, which is one of the eight so-called Indian ‘unicorns’ with billion-dollar valuations, the addition of Housing will open up a new revenue stream and add a well-known brand to its portfolio. Nearly a dozen investors including Tiger Global, Warburg Pincus, Steadview Capital and Norwest Venture Partners have invested around $360 million in six funding rounds so far. This includes $150 million it raised in April this year, valuing the startup at over $1 billion.

Earlier this year, Quikr founder Pranay Chulet said the company will hire 500 people to beef up its online real estate business, Quikr-Homes.com. For the investors in Housing, the deal will give them a chance to be a part of a larger business and cut their losses in a company whose fortunes have dwindled rapidly because of a spate of controversies triggered mostly by Yadav. In the recent times, Yadav, who led a dozen college-mates from IIT-Bombay to start Housing in 2012, has had public spats with venture fund Sequoia Capital and disparaged the intellectual worth of investors in his company. He resigned at the end of April, but was asked to stay on by the board which appointed a committee to oversee operations.

“The investors have been looking to exit for some time now — the startup has been making news for all reasons except the market it addresses,” a person familiar with the talks, was quoted in the report as saying. 

So far, Housing has raised around $140 million from four investors including SoftBank, Helion Venture Partners and Nexus Venture Partners. According to a media report, Yadav agreed to step down as CEO, with an announcement expected on his departure during the next board meeting on July 1. The agenda of the meeting is to finalise talks with Quikr and come up with a restructured top management and head for Housing.com.

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