Home Rental Startup NestAway Sold to Aurum PropTech at Steep 95% Valuation Cut Aurum has said that it will infuse Rs 30 crore to enable NestAway's business to remain stable.
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NestAway, a home rental startup backed by Goldman Sachs and Tiger Global, was acquired by Aurum PropTech, a maker of software for real estate businesses, in a fire sale for INR 90 crore after raising INR 905 crore (USD 110 million) over the years. This transaction took place at a time when investment for Indian startups has dropped to a fifth of last year and unicorn valuations have collapsed.
The most recent round of fundraising for NestAway took place in 2019, when it received funding valued at USD 220 million (INR 1,810 crore) from reputable investors like Yuri Milner, Flipkart, Tiger Global, UC-RNT Fund, and Goldman Sachs. This indicates that NestAway's sale occurred at a valuation that is not just less than one-tenth of the funds it raised from the private market, but also a 95% decline from its previous valuation.
One of Nestaway's co-founders, Jitendra Jagadev, who left the proptech startup in 2019, is also a director of one of Aurum's subsidiaries, according to an exchange filing by the company. HelloWorld Technologies, a subsidiary that was purchased from Nestaway in March 2022 for a cash consideration of INR 42 crore, specialises in co-living.
Aurum also said in the filings that it will inject INR 30 crore to enable NestAway's operations to become more stable. According to the company, this investment shows a strong belief in the $20 billion rental housing market's potential.
NestAway had a platform with 50,000 properties before the COVID-19 outbreak and generated an annualised revenue of INR 100 crore. Currently, however, the number has fallen to 18,000 properties and an annualised revenue of INR 30 crore. Even if the number of listings has decreased, the platform still receives 600,000 visits per month, according to Aurum.
In 2022, 2021, and 2020, NestAway reported earning INR 25.43 crore, INR 52.05 crore, and INR 78.27 crore respectively.
Following the acquisition, Jitendra Jagadev and Ismail Khan, who were initially a part of NestAway's fundraising team and later became founders of HelloWorld, will assume leadership responsibilities within NestAway, the firm has said.
On June 2, Aurum shares ended the day 6.6 percent higher at INR 125.55 a share. The market capitalization of the company is now INR 359.45 crore.