Young, working people in India have a new best friend—renting. From furniture and appliances to vehicles and even, well, drinking water subscriptions. So when Subhajeet Rout signed up for online home rental platform Nestaway, he didn’t expect he’d be calling it “the biggest mistake of [his] life” not much later.
Rout registered with Nestaway due to its “hassle-free” renting claim. It has been anything but, says the 26-year-old avionics engineer based out of Hyderabad.
“It’s a Pandora’s box of issues. Where do I begin?” he exclaims. Rout’s frustration with the platform has resulted in him starting a petition on Change.org called Say No to Nestaway.
“There was a water supply crunch in that particular apartment but we were not informed prior. Rather, they used to charge us extra for water. For any repair work, we had to follow up so much that eventually we would give up. The worst was when they deducted a huge amount from the security deposit, falsely claiming it as maintenance charge,” says Rout.
He now stays in a 3BHK he found on the classifieds platform Quikr, sharing it with his brother. “I am much happier. There is privacy and there is no hassle of asking someone again and again for repair and maintenance,” he adds.
Rout is one among 105 aggrieved who signed his petition. He isn’t alone in this. Pune-based Sansar Saxena, for one, had to approach a consumer court to claim his security deposit from Nestaway.
Nestaway, established in 2015, was born with the promise of easing rental by handling search to rent agreements to maintenance. The platform acts as a mediator between homeowners and occupants. Wealthy Homeowners sign up on the platform and let the company manage their property, while the individual, couple or family renting needn’t to go through many hoops (and negotiations) to find a liveable place. (The Ken wrote about Nestaway’s business model in an earlier story.)
At least, that was the premise.
Today, the company is, quite simply, not looking good. Nestaway is being panned across social media and consumer complaints platforms, two of its founders have left the company, and its losses have surged by over 60% to Rs 157 crore ($22.08 million) in the year ended March 2018. In all of this, the company is attempting to grab at what is being touted as “the next big opportunity”—co-living—with its brand The Hello World (THW). But co-living is a crowded space, with new, aggressive companies like Zolostays, Coho and Colive competing to emerge on top.
That’s not all, sources say Nestaway is struggling to raise funds. Of the $100 million that it set out to raise in November last year, the company could barely raise $20 million in a Series D round from existing investors this year.