NestAway eyes IoT solutions for growth; plans to raise $50 million

Home rentals startup NestAway is in talks to raise about USD 50 million in the next few months to scale up operations and invest heavily in services for tenants based on Internet of Things (IoT) solutions.

These services could include IoT-based home cleaners and drones that could fly on behalf of potential tenants to shortlist properties.

Founded in 2015, the company has so far raised over USD 40 million in funding from investors including Tiger Global, Russian billionaire and founder of DST Global Yuri Milner, and Tata Sons chairman emeritus Ratan Tata. The existing investors, along with the new ones, are also expected to participate in the new funding round.

For FY16, NestAway recorded losses of Rs 37 crore on revenues of Rs 5.8 crore.

The Bangalore-based startup provides a listing of available accommodations for rent across major cities.

It manages the complete renting cycle of a property on behalf of the owners, including rent collection and assisting a tenant to move out at the end of the contract. The company charges a certain percentage of the monthly rent it generates from a property as commission.

Exploring IoT in rentals market

IoT is one such area where the startup sees immense potential. To start with, the company has already piloted a smart lock system, which allows the tenants to lock or unlock the house remotely through their smartphones.

“It also reduces the friction of our representative and the user fixing up a time to meet. They can just drop by and we can remotely lock or unlock it,” Nestaway co-founder Deepak Dhar explained. Flying drones inside the house to capture the living space from every possible angle is another idea that the company is exploring, besides enabling an IoT-based cleaning device.

“The idea is to simplify the lives of our users. Especially when it comes to families, there is an elaborate short listing process. They have to go and see multiple houses, coordinate on time along with work, consider a number of things that must suit their specific requirements,” he said.

NestAway’s efforts to use augmented reality and drones could simplify lives of potential tenants who have to visit multiple properties before they can shortlist one.

“If they (tenants) can accurately gauge the house and its surrounding with technological capabilities, it will cut down the inconvenience of visiting each and every house, at least in the short listing phase,” he added.

Aims to become profitable in two years

“The company expects to break even in next 15 months in Bangalore market, while on a company-level profitability it will take us two more years, depending upon how many new markets we add,” Dhar told Moneycontrol.

The company is exploring to expand its reach to students and shared living for senior citizens too.

It is also aiming to capture the rental market for families too - post its acquisition of another online home rentals startup Zenify, this month.

“The market for family rentals is huge amounting to about USD 60 billion in top 10 cities. Rentals for bachelor’s accounts for about USD 10-15 billion annually, of which we do just about USD 5 million per month. We want to focus on family (segment) also, given the size of the market. We don’t want to remain a marketplace just for bachelors. We may (later) expand to include senior citizens and students,” Dhar said.

The company manages over 7,000 homes across 8 cities of Bangalore, Delhi, Gurgaon, Noida, Ghaziabad, Hyderabad, Pune and Mumbai.

Including Zenify’s over 3,000 homes under management, NestAway now has over 10,000 properties on its platform.  “We will target selective markets where there is ample supply and demand,” he added.

For now, the startup is concentrating on building a team to explore smart solutions for homes it rents out with a view to increase its post-rental services pie.

durba.ghosh@nw18.com