For online real estate startup housing.com, which has been in the limelight for wrong reasons for quite some time, bad news seems to be turning worse.
In a recent filing with the Registrar of Companies, housing.com reported a net loss of Rs 279 crore for 2014-15, a near six-fold jump from the Rs 49 crore loss in the year-ago period, though total revenue for 2014-15 rose also rose over six-fold to Rs 12.66 crore from Rs 1.91 crore in the previous year.
Evident from the filing is that the company’s expenses are out of control, even by startup standards: employee cost (salaries etc) have jumped four-fold to Rs 86 crore, and marketing costs 10-fold to Rs 122 crore in the financial year. Interestingly, it spent Rs 27.33 crore on legal costs, which is more than twice its revenue.
Even established realty majors such as Delhi-based DLF typically spend around 2% of revenue on legal costs.
Among housing.com’s main competitors, 99acres had an operating loss of Rs 37 crore on a revenue of Rs 100 crore in 2014-15, and CommonFloor, Rs 46 crore on Rs 87 crore revenue.
The housing.com spokesperson did not reply to emailed queries from HT. Softbank, which is the single largest shareholder in housing.com, also refused to discuss the issue. It had sunk $90-million in the company in November, 2014.
After founder-CEO was removed in June 2015, housing.com was headed by Rishabh Gupta for a short while, before Jason Kothari took over as chief executive in November.
India’s real estate sector is in the throes of a slowdown, and unsold stock has risen by 18% to 1,076 mn square feet in the quarter ended September 2015 (year-on-year) according to Liases Foras Real Estate Rating and Research.
The company reportedly laid off 600 of its 2,600 staff last year,and is now said to be in talks for investments with Snapdeal and News Corp, which has invested in another online realty company, PropTiger.
Quikr Homes, also rumoured to be interested in buying housing.com, refused to comment for this story.