In mid-2015, the top brass of Tiger Global, a venture capital firm known for its aggression, was in Bengaluru to meet the promoters of CommonFloor. It was one of India’s largest real estate portals and had received an investment of $30 million from Tiger the previous year. The relationship dated back to 2012, when Tiger first invested and since then had taken part in every round of funding, with this being the fourth.
The discussion was smooth till Tiger dropped the bombshell. The VC firm, along with Sweden’s AB Kinnevik and Hong Kong-based Steadview Capital, had freshly invested $150 million in Quikr, an online classifieds platform. This had resulted in Quikr turning a unicorn and Tiger was understandably enthusiastic. To the horror of CommonFloor, a company set up in 2007, Tiger said it was not keen on investing in two companies operating in real estate. The diktat, as a former official recalls, was to get acquired by Quikr. “It was a forced marriage,” he says.
The process moved swiftly and in January 2016, the official announcement was made. It would be a $200-million deal with almost all of it by way of stock in Quikr. At that time, CommonFloor had revenue of around Rs.400 million and was well set for growth, according to industry trackers. Thus, the deal with Quikr raised a few eyebrows. The online-classified player was in the midst of a rather ambitious diversification strategy by getting into areas such as cars, jobs, beauty and wellness, apart from real estate. Since then, Quikr has struggled, points out the same ex-CommonFloor official. Last year, Quikr had revenue of Rs.1.89 billion accompanied by a loss of Rs.1.87 billion. From once being a unicorn, Quikr is now valued at $569 million with a serious job on its hands.
Getting off the ground
It was in 2008 when Pranay Chulet teamed up with Jiby Thomas, his former colleague at eBay, to set up Quikr. With a chemical engineering degree from IIT Delhi followed by an MBA from IIM Calcutta, Chulet had the right pedigree. His work experience included consulting stints in the US. In 2015, Quikr (having started life as Kijiji India in 2005) was still a Rs.530 million organisation with losses close to Rs.4.50 billion. Funding in excess of $350 million had already come in from the likes of Omidyar, Matrix Partners, Norwest Venture Partners, Warburg Pincus, Nokia Growth Partners and most recently from Tiger Global (See: Buying tim