Technology is finally changing the real estate business in the West, but the issues around home purchase and rental are all the more acute in emerging markets. In many parts of the world, property information is limited and haphazardly organized, and a variety of actors — each with their own interests — are unavoidably and centrally involved.
Doorkeys is a new startup in India that wants to bring the process of buying a home online to make things more transparent and efficient.
Founded by real estate veteran Subhash Bedi, chairman of Rising Straits Capital, and entrepreneur Arjun Basu, who co-founded services marketplace Mydala.com, the company is backed by an initial $2 million in capital and it went live on September 1.
Bringing real estate online
The platform is essentially a marketplace between buyers and sellers. Unlike competitors such as NoBroker, which disintermediate middlemen entirely, Doorkeys is pro broker. That’s to say that it wants to work with the existing system and its actors but move them into the digital era.
“The U.S. has never been able to disinter-mediate the broker, so how is a highly untransparent market like India going to?” Bedi told TechCrunch in an interview. “The concept seems very far fetched. We like to think of Doorkeys like an online CRM system for the broker.”
Doorkeys is a marketplace that enables buyers to look up potential properties based on location, price and other variables. Sellers, aka brokers, are all graded so when it comes to finding someone to arrange a viewing and, later, deal, buyers can look up the top-rated brokers and browser past comments based on their performance. The idea is to incentivize brokers to act in the best interests of buyers, something that many do not do right now in India.
“There are over 500,000 brokers in India. It is very fragmented, [but] we will provide them with tools and use their knowledge of neighbors and cities to build a framework around this unregulated area,” Basu added, explaining that a number of offline functions also require brokers.
The company doesn’t charge sellers and buyers, instead it monetizes through an undisclosed commission fee on deals. Already, it is aiming for an ambitious $70 million in annual take-home revenue within the next two years.
“We have already tapped into some of the largest broker networks and they understand the value add. They are not paying ridiculous money for leads or, in the case of traditional advertising, fake leads,” Basu said.
Focused on local
Bedi explained that he began talking to Basu about the idea after he scouted India for investment opportunities in the property tech segment but came away unimpressed.
Initially, Doorkeys covers New Delhi and we shouldn’t expect a rapid expansion for now, the founders clarified.
“Launching in New Delhi first is very important because it is a local game,” Basu explained. “[We need] to make the unit economics work on a local level first.”
Looking forward, he said that India’s top eight or so cities account for around 80 percent of the country’s real estate transaction volumes so the target will be a presence in those tier-one locations rather than across every corner of India.
In line with that focus on proving its model, the company wants to keep its costs “lean.” It currently has around 40 staff and plans to double that number before the end of the year.
“The founding team will continue to put money in [and] there are various large influencers in the real estate industry who will be putting more seed-type money in over the coming months,” Bedi said. “Eventually, we will look to add a “grade a” investor — having said that, the key thing is to keep the burn rate low, it is an asset light model and you need to wait for adoption.”