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Indian Online Classifieds Startup Quikr Expanding Quickly

Posted on Tuesday, Sep 12th 2017

According to a KPMG report published in 2016, the Indian online classifieds industry is projected to grow from $0.5 billion to $1.2 billion by 2020 at a CAGR of 22% driven by rapid growth of the e-services, real estate, and automobiles verticals. Quikr is a leader in this industry and also one of the most heavily funded startups in India.

Quikr’s Journey

Quikr was founded in 2008 by Pranay Chulet and Jiby Thomas in Bangalore. While working in New York, Pranay was inspired by how digital players like Craigslist were disrupting the traditional classifieds market. He came back to India to start a platform where the local community within a city could come together to buy, sell, rent or find anything in the neighborhood. It was initially launched in 2005 as Kijiji India, which was owned by Kijiji International, an eBay Inc subsidiary.

It initially started as a classic horizontal platform that brought buyers and sellers together. Today, it operates several large classifieds businesses across C2C, Cars, Education, Homes, Jobs, and Services. Real estate is its largest vertical, accounting for about 35% of its total revenue.

Users can list over 100 types of products ranging from mobile phones, electronics, cars, bikes, jobs, furniture, homes, to services. From a listing platform, it has expanded to enable payments on its platform as well as facilitate logistics across cities.

It gained popularity with the introduction of features like the Maximum Selling Price (MSP) calculator to determine a fair price range, a chat facility called QuikrNxt that maintains users’ privacy, and the ‘Missed call’ service that helps non-Internet savvy consumers post ads.

Today, it has over 4 million listings on its platform and over 30 million unique visitors. It is present in over 1200 cities in India and has 1,500 employees.

Quikr’s Financials

Quikr’s revenues come through third-party advertisements, lead generation for car dealers and real estate brokers, and paid listings by sellers. Quikr’s FY16 total revenue grew 44% to Rs 95 crore ($15 million) while net loss widened 20% to Rs 534 crore ($83.5 million). The company started controlling its expenses since FY15 when losses had doubled. In particular, advertising promotional expenses grew a mere 4% in FY16 compared to 140% a year ago. The company aims to break even by March 2019.

Quikr has raised over $350 million in funding so far from investors including Kinnevik AB, Tiger Global, Steadview Capital Management, Matrix Partners India, Brand Capital, Coatue Management, eBay, Falcon Edge Capital,  Nokia Growth Partners, Norwest Venture Partners, Omidyar Network, and Warburg Pincus. It last raised $150 million in April 2015 at a valuation of about $900 million.

Since then, Quikr has acquired 11 companies including Salosa, Stayglad, and ZapLuk in the home services segment; Commonfloor and Grabhouse in the real estate segment; Hiree and Babajob in the Jobs segment; and Stepni in the automobile services segment. These businesses now account for 55% of its total revenues. Notable among these are its acquisition of online real estate services firm Commonfloor for around $100 million in a share swap deal in January 2016 and the recent acquisition of competitor Babajob in May 2017 to strengthen its position in the blue-collar jobs vertical where it has already achieved breakeven. CommonFloor, founded in 2007, had raised $63 million. Babajob, founded in 2007, had raised about $10 million.

Following these acquisitions, Quikr’s valuation is estimated to be about $1.5 billion, 100 times its 2016 revenue of $15 million.

Competition has kept pace with its expansion. While Quikr is heavily funded, it faces competition from well funded startups within each segment. Its competitors include Naspers-backed OLX in the C2C segment, CarTrade that has raised a massive $240 million and CarDekho that has raised $65 million in the Automobile segment; PropTiger that has raised $85 million and acquired early this year and Magicbricks that has raised over $300 million in Real Estate; Housejoy that has raised $27 million and UrbanClap that has raised $57 million in hyperlocal Services; and Info Edge-backed Naukri and AsaanJobs (raised $6.5 million) in Jobs. So, Quickr’s $350 million funding is up against double that funding amount of its competitors.

To add to this, now Amazon will also count as a competitor in the C2C segment with its new Local Finds service for used goods launched in Benguluru, Chennai, Hyderabad, and Mumbai.

Valuation Analysis

I am afraid I don’t buy into the valuation numbers being placed on the company. The revenue to funding ratio is lopsided, and monetization is inadequate for the company to be valued at $1.5 billion, not to mention the losses that are simply ridiculous at this revenue level.

Photo Credit: Abinash Mohanty/

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