India’s urbanisation isn’t happening without a cost. With more and more people now moving towards urban cities in search of better prospects, the demand for rental properties is always on the high. That along with the lack of regulation has left the rental ecosystem in a state of disarray. Disputes of every kind between landowners and tenants are well documented. It’s circumstances like these that can inspire people to do something and come up with a solution.
Amarendra Sahu, Deepak Dhar, Jitendra Jagadev and Smruti Parida would be those people. Together they founded Nestaway, a rental solution that bridges the gap between homeowners and tenants. With a $94.2 million from prominent investors Nestaway is changing the rental ecosystem.
We had the opportunity to catch up with their team and ask questions about their vision, challenges and the strategy going forward. Here’s what they had to say:
1. Could you brief us about how your business model works?
At Nestaway, we’re trying to address the problems faced by both stakeholders of the rental ecosystem – house owners and tenants – by bridging the gap between them. We help the two by providing them with a financially viable and a hassle-free renting solution. Nestaway offers a range of benefits for tenants like no brokerage, low-security deposit, instant move in, assisted maintenance, furnished houses with DTH & wifi and is present in eight cities – Bengaluru, New Delhi, Noida, Gurgaon, Pune, Hyderabad, Ghaziabad, and Mumbai.
Nestaway offers an end to end renting solution through which homeowners can list their homes and decide the rent that they wish to charge. Prospective tenants can then schedule visits and can book the home online should they decide to rent it. Once a tenant starts living with us, they pay their rent online every month until the end of their stay.
The company has been able to make their presence in the market by partnering with several committed affiliates partners. These affiliate partners are individuals who work with the company (part-time or full time) and help in expanding NestAway’s network in different areas.
2. What inspired the inception of the company?
The origin of NestAway Technologies is directly linked to the problems faced by urban migrants, including working professionals with diverse culture, ethnic and linguistic background while searching for a rental accommodation. NestAway strongly believes that there are two critical aspects to solving the problem of urban migrants’ housing – Barriers (logistics) and Biases (mindsets, especially that of landlords, that prevent seamless acceptance of a so-called ‘outsider’ into a new city).
The company was founded by Amarendra Sahu, Deepak Dhar, Jitendra Jagadev and Smruti Parida in 2015.
Nestaway was formed to make living conditions better for people in India with a focus on single people. The founders wanted to enter the largest rental market space in India. The idea was not just about providing a platform to rent houses, but also provide the necessary amenities to make the process of shifting to a new house hassle-free. Anything that user would want could be rented through NestAway. These tenants also had the option of multiple gateways and avenues to pay for services.
3. What was the key strategy the company is following since its inception?
The passion to provide a robust home rental network solution brought us together – since then there has been no looking back. Other discovery platforms had tried to solve it with listings – now we are closing the loop by offering other services as well. Despite the dire need for such a service, we had to disrupt what is probably the most difficult aspect: people’s mindset. In a pluralistic country such as ours, discrimination in one form or another is common. We hope such biases are soon rooted out. Owners have to sign a policy with us – an oath to not discriminate. It shows the changing mindset. ‘Homes That Don’t Discriminate’, our first integrated marketing campaign, was an attempt to resolve barriers and biases.
NestAway has also been focusing on innovative technologies to make the process of renting a house easier and hassle-free for the customers. NestAway also launched the Smart Locks that allows the tenants to lock or unlock the house remotely through their smartphones.
4. “The industry brims with theories on what makes millennials tick.” To what point you agree with this with your business?
According to the latest census, India is expected to become the youngest country by 2022, with an average age of 29. Millennials have thus become the juggernaut that can exercise immense influence on the way businesses run these days. As the online rental market is highly skewed towards millennials, it is of utmost importance that companies provide close attention to millennials’ needs by providing appropriate solutions and a friendly environment. Co-living, as a concept is also gaining popularity in India and is expected to also provide monetization opportunities to developers and homeowners, especially if they have an idle inventory.
5. Do you plan to expand your brand presence across other regions?
With 10.4 million migrant student population and only 6.1 million beds as the current official supply, there is an increase in demand for student housing that is growing day by day. Keeping this in mind, NestAway, is strongly focusing on student housing and has started operations in Kota, Rajasthan and will soon commence operations in Delhi (North Campus) and Bangalore. NestAway is also looking at expanding PAN India and conversations with progressive builders across the country for exclusive properties earmarked for students, are underway.
NestAway started focusing on family rentals early last year, going on to acquire Zenify in May. Today, 40% of new bookings on the Nestaway platform come from the family segment with a ratio of 65:35 for shared versus family rental houses.
One by NestAway
NestAway is also evolving the concept of bringing homes to you, and this time, with your kind of people. Through One by Nestaway, NestAway brings to you private and shared accommodation inclusive of utility services and hassle-free maintenance. These services include electricity, water, drinking water, WiFi, housekeeping, and DTH. As part of this project, NestAway also curates housemates for every tenant based on their living preferences like food preference, smoker/non-smoker, night-shifter, etc.
Building the Co-Living Concept
One area of focus for the brand is the concept of co-living, where NestAway takes up the entire building including the shared facilities such as gym, libraries, common areas, game room, among others. Through this concept, NestAway is trying to create a community where the members can share common interests engage in yoga/salsa classes, have talk sessions from seasoned entrepreneurs/sportspersons, promote start-ups and collaboration, among others.
NestAway till date has raised $94.2 million in funding by investors such as Tiger Global, IDG Ventures, Ratan Tata, Yuri Milner and Goldman Sachs. NestAway is currently earning over $4 million (Rs 26 crore) a month in rentals and is looking at 8-10 top cities, where they can have a greater penetration in the market. NestAway aims to onboard 50,000 houses by 2020 to break even.
6. Share the biggest achievement of your company till date?
NestAway is the largest online home rental company in India today with $94.2 million funding in their kitty. Within only 3 years of inception, NestAway has expanded from 10 houses in only one city to 17,000+ houses across 8 cities in India.
7. Where do you see your industry going in next five years?
The concept of shared economy is evolving and growing exponentially in India. With the rise in adoption of rentals due to lower prices, reduced maintenance cost and growing penetration of smartphones and internet subscribers, the shared economy will affect companies across sectors.
With the rise in real estate prices, the home rental market is gaining traction in India and is expected to grow at an exponential rate. In the next 5 years, we feel that the investment in the housing sector will further decline with millennials opting for rental accommodation.
8.What makes you different from your competitors?
Nestaway focuses only on home rental solutions, unlike competitors who often feature properties for sale. We take a two-month security deposit from our tenants and do not charge brokerage fees.
We have always believed in giving a hassle-free experience and a sense of belonging to the migrant who has moved to a new city. The transaction should have a dignity; tenants should be treated as responsible adults. Other than single-family rentals and paying guest accommodation, sharing apartments is the home rental model that is common in India. Its advantage is obvious: working individuals or students can pool in money and share an apartment, having their own privacy away from the owners even while living together. NestAway is also building technologies to provide safer homes to its tenants.
9. What is the success mantra of the company?
NestAway being a product-driven company, our key focus has always been on our employees taking complete ownership of the problems faced by tenants and owners while finding the right solution. We strongly believe that individual success and happiness of the employee is a key step in making sure that the company succeeds in all its endeavors.
10. Two suggestions for the aspiring entrepreneur and upcoming startups?
Experimenting is a good way to understand the best value proposition that you can provide to your customers. Being open-minded and believing in your instincts can help you go a long way in creating a viable and successful start-up.
In addition, we believe that it is extremely important that if you face any setbacks, try not to be too hard on yourself. Instead, it is important that you retrospect and learn from your failings. This will help you not to repeat the same mistakes again and make it easier for you to achieve your goals.