The rumour mills have been abuzz that PropTiger is going to acquire Housing. Over the last couple of weeks, The Ken spoke to six people, a mix of investors, sources inside Housing and competitors, and all of them said that the deal is almost through. That it will be announced shortly. The deal size is about $20-25 million. All stock.

But why, really?

The last available financials of Housing (Locon Solutions Private Ltd) paint a fascinating picture. As of March 2015. Revenue from operations: Rs 5.4 crore. Other income: Rs 7.1 crore. Total revenue: Rs 12.6 crore. Total expenses: Rs 291 crore. Total loss: Rs 279 crore. Housing’s numbers for March 2016 aren’t in yet. Sources say, there hasn’t been a massive uptick in revenue. Housing shut down its rental business. There have been fewer ads. In fact, 2016 should only be remembered for one thing, cost cutting — exit of founders, massive layoffs and complete freeze on marketing expense. A shriveled, tiny, lost-on-purpose company that burnt through $150 million of investors’ money, in just under two years has been on the market for a while. Peddled to every competitor, large and small. They’ve all looked inside and found nothing of value. And now, comes along PropTiger.   

“…for online leads, also for SoftBank”

The Ken looked at Housing’s Information Memorandum (IM) dated May 2016. When Housing was looking to raise $25 million from investors — $17 million for operating capital to be spent on employee expenses and marketing and $8 million for new initiatives, contingencies, and other expenses. Other than that, to put it in a nutshell, this was Housing’s sell point:

Compared to?

The comparison makes for an interesting slide but it is not entirely true. Verified listings, marketing, and advertising support for builders, platform for brokers, buyer discussion forums are standard offerings today across all online real estate players. In fact, most online real estate players believe that the only thing that matters, at least where buying of houses is concerned, is the quality of lead and its conversion offline into a purchase. “See, a lot of players keep talking about the lead generation,” says the CEO of a large online real estate company, who requested not to be named. “Housing is also touting the same thing. That it will bring leads. But what matters is how many actually convert. Builders are really smart and they often get back saying the lead was worthless.”

What about other competitive factors? Exclusive relationships with builders and brokers. Housing isn’t anywhere close to being on top of this game. There’s news of a start. Only last month, Tata Housing and entered into an agreement to build a digital marketing platform which will put out Tata Housing’s inventory online, of all projects.