Venture capital investors are finding new avenues to tap India's domestic consumption story.
In the latest deal, real estate transaction services firm Agni Property Group has raised $12 million from Silicon Valley based venture capital firm Foundation Capital and India based Helion Venture Partners. Both VC firms are investing $6 million each for a minority stake in the company. Foundation's Ashu Garg and Helion's Sanjeev Aggarwal are joining the board of the company as part of the deal.
Delhi-based Agni Property Group partners with property developers in various cities for selling mainly new properties and charges a commission on the asset value of the property. Most of the business of the firm is focused on individual home buyers, comprising of around 80% of its sales. The firm charges a commission of anywhere between 3% and 12% depending on the property.
Agni Group expects revenues of $25 million by next year and is targeting $25-100 million in the next 3-5 years. The firm has already tied with more than 170 developers across 19 locations in India.
With the new round of funding in place, the company also plans to enter broker housing finance for buyers through Agni Finance. This unit work will with housing finance majors like HDFC to help buyers get loans, which fits in well with its real estate transaction services business.
Agni's business model is based on companies like China's E-House (China) Holdings Limited, which was listed in New York Stock Exchange in 2007. E-House currently offers services like real estate advertising, consulting and also manages a PE fund besides offering primary and secondary real estate brokerage. It currently has a market capitalisation of $1.36 billion.
Several financial services players and classifieds players offer real estate brokerage as a service. There are portals like Allcheckdeals by Info-Edge Ltd (owners of Naukri) and financial services firm Unicon (backed by Nexus and Sequoia) which have a presence in this space. Helion and Bessemer backed NetAmbit InfoSource, which primarily sells financial products, also has a presence in this space, though minor.
Samarjit Singh, who earlier founded Candid Marketing (acquired by International Marketing & Sales Group Plc in 2006, and was bought back by the management including him in 2008), is the CEO and founder of Agni Property Group. Its board of directors include Pranav Ansal, MD and Vice Chairman, Ansal API Group of Industries, and Rishi Khosla, CEO of Copal Partners.
For Foundation Capital, this is the third disclosed deal this year. It had earlier invested in Aspire Human Capital Management Pvt Ltd, a Gurgaon-based education services firm and pre-school to K-12 education firm Tree House.
“Raising additional capital at this stage of rapid growth will further enhance our commitment and help us expand our presence to new markets in India. Agni believes in service excellence and financial strength and this partnership would therefore, accelerate our growth plans in the professional property broking business to emerge as leaders in this space," said Samarjit Singh, Managing Director, Agni Property.