Indian online classifieds platform Quikr is one of the most heavily funded startups. Despite low revenue and profitability numbers, its valuation was skyrocketing. In recent times, its valuation has been marked down and its profitability has improved.
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. The company was initially launched in 2005 as Kijiji India, which was owned by Kijiji International, an eBay Inc. subsidiary.
Quikr initially started as a classic horizontal platform that brought buyers and sellers together. Quikr allows users to list over 100 types of products ranging from mobile phones, electronics, cars, bikes, jobs, furniture, homes, to services. From a listing platform, Quikr has expanded to enable payments on its platform and facilitate logistics across cities.
Today, Quikr operates several large classifieds businesses across C2C, Cars, Education, Homes, Jobs, and Services. Real estate is its largest vertical, which accounts for about 30% of its total revenue and is its most profitable vertical. Its used cars and bikes segment accounts for 20%, the services segment (QuikrEasy) accounts for 15%, while QuikrJobs accounts for 15% of its total revenue. The remaining 20% revenue comes from user transactions and goods sold via its online classifieds marketplace.
Quikr 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.
Quikr’s revenues come through premium listings, lead generation for car dealers and real estate brokers, and third-party advertisements.
Quikr’s FY17 total revenue grew 54% to INR 63.7 crore ($9 million). Including revenue from its acquisitions, Quikr claims that its cumulative revenue during FY17 was INR 109 crore ($15 million), which indicates that acquisitions account for about 42% of its revenue.
Net loss narrowed 46% to INR 301.2 crore ($41 million) from 534 crore ($83.5 million) in FY16. The company started controlling its expenses since FY15 when losses had doubled.
For FY18, Quikr expects cumulative revenue of INR 202 crore ($28 million) or a growth rate of 85%. It expects losses to reduce further by 40% to INR 121 crore ($16 million). While QuikrHomes is already profitable, the company claims that QuikrJobs became profitable at the end of 2017. It expects all of Quikr to become profitable in another six quarters.
Quikr has raised over $430 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. The company has a ridiculously low revenue level given its funding.
Quikr’s Acquisition Spree
Since 2015, Quikr has been on an acquisition spree. It has acquired 13 companies including Salosa, Stayglad, ZapLuk, and Zimmber in the home services segment; Indian Realty Exchange (IRX), CommonFloor, Realty Compass, and Grabhouse in the real estate segment; Hiree and Babajob in the Jobs segment; and Stepni in the automobile services segment.
Its latest acquisition was in December 2017 when it acquired two subsidiaries of HDFC focusing on real estate brokerage and property classifieds for INR350 crore ($56 million). Its biggest acquisition was in 2016 when it acquired online real estate services firm Commonfloor for around $100 million in a share swap deal. CommonFloor, founded in 2007, had raised $63 million.
Following its acquisition spree, Quikr’s valuation also expanded to $1.5 billion, 100 times its 2016 revenue. However, Swedish investor AB Kinnevik has marked down Quikr’s valuation by 12% to $884.94 million, about 60 times its 2017 revenue. That is a well-deserved valuation cut for a company that’s been around for 10 years but is still to see revenue and profit numbers that justify such a high valuation.
As Quikr expanded, so did its competition. Its competitors include Naspers-backed OLX in the C2C segment; CarTrade and CarDekho in the Automobile segment; PropTiger and Magicbricks in Real Estate; Housejoy and UrbanClap in hyperlocal Services; and Info Edge-backed Naukri and AsaanJobs in Jobs. Amazon’s Local Finds and Facebook Marketplace are also disrupting the online classifieds market.
What do you think about Quikr’s valuation and profitability? Will it be able to meet its goals? Is Quikr able to sustain your interest? Which vertical do you identify Quikr with? Is its expansion working to retain you as a user? What attracts you to Quikr? What attracts you to its competitors and turns you away from Quikr?
Photo Credit: Abinash Mohanty/Flickr.com.