DS Group-backed home rental marketplace Fella Homes acquired by rival ZiffyHomes

Ziffy Technologies Pvt. Ltd, which operates home rental marketplace ZiffyHomes, on Thursday announced the acquisition of rival Fella Homes for an undisclosed amount.

Sanchal Rajan, co-founder and chief executive officer of ZiffyHomes, told TechCircle that the deal was a mix of cash and equity.

The two startups operate out of Delhi and Gurgaon respectively.

ZiffyHomes said in a statement that the acquisition was in line with its expansion strategy, adding that it would now become one of the largest aggregators of exclusive rental properties in the Delhi-National Capital Region.

The diversified Dharampal Satyapal Group (DS Group), which was an investor in Fella Homes, will join the board of ZiffyHomes. Rajan said DS Group's early investment in Fella Homes will roll over into the merged entity.

Started in 1929 as a maker of tobacco products, privately-held DS Group has diversified into spices, dairy, food and beverages, hospitality, infrastructure and agro forestry over the years. Its consumer brands include Pulse candy, flavoured paan masala Rajnigandha and dairy products Ksheer and Dairymax.

The founding team of Fella Homes is expected to join the top deck of ZiffyHomes.

“Currently, Virendra Pratap Singh [one of the co-founders] has confirmed his on-boarding into our team as our new chief business officer,” Rajan said. "The other co-founders are yet to convey theirs [joining]."

Besides Singh, Fella Homes' other co-founders include Yadwinder Paul Singh, Digendra Singh Rathore, Kunal Singh and Amit Gupta.

After starting operations in 2015, Fella Homes had raised $2 million in July 2016 from unnamed investors besides DS Group, according to an Inc 42 report. Around the same time, media reports stated that it had acquired Noida-based home rental startup LifePad.

The startup offers a network of ready-­to-­move-in, to-let fully furnished homes with amenities in Gurgaon, Noida, Greater Noida, Ghaziabad and Delhi.

Founded by Sanchal Ranjan and Saurabh Kumar, ZiffyHomes also set up shop in 2015. It lets users rent or let out homes through an entirely online process that does not involve brokerage.

It offers ready-to-move-in individual rooms to tenants for long stays without any maintenance considerations. If also offers the option of paying rent online.

ZiffyHomes had last month raised Rs 2 crore ($313,503) from a group of angel investors led by Bikky Khosla, chief executive of business-to-business portal Trade India and Anirudh Agarwal, managing director of diversified business conglomerate Shree Sharda Group. The two investors were expected to join the startup’s board.

The company's presence is currently limited to Delhi-NCR and it is now looking to expand to other cities.

ZiffyHomes competes with Bengaluru-based NestAway. Last December, NestAway reportedly raised $50 million in a round led by UC-RNT Fund along with participation from existing investors IDG Ventures and Tiger Global.

In the broader rental and accommodation space, Noida-based Rental Stay Pvt. Ltd, which operates student housing solutions platform Placio.in, raised $2 million in a pre-Series A round from Singapore-based private equity fund Prestellar Ventures earlier this month.

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