Square Yards builds new margins, brick by brick

MUMBAI: Online real estate portal Square Yards is steadily cementing its growth story, adding new revenue streams - two at a time.

The firm which is backed by the private equity arm of the Anil Ambani-led Reliance Group is widening its business with the introduction of its broker aggregation platform (Square Connect) and residential property management services (Square Care).

The broker aggregation platform, launched as a pilot a year ago, aggregates around 15,000 brokers with a commission-based revenue model that realises demand for exclusively sourced developer projects. "The vertical clocks about 150 transactions each month with a 40% quarter-on-quarter growth and is targeting 1,00,000 brokers by FY18-end," said CEO Tanuj Shori.

Square Yards, which focuses on the NRI customer segment - that forms 30% of its revenue share - is also set to launch a residential property management platform 'Square Care' targeted specifically towards the NRI community.

The commission-based platform will provide intermediary management services for maintenance and managing rents for landlords and owners.
Nestaway follows a similar model for home rentals but is different from Square Yards, in that it is inventory-led. The international business is a key revenue churner for Square Yards with the NRI real estate segment and the global real estate together forming 40% of the revenue pie.

The entry into two new verticals comes at a time when the Gurugram-based company has clocked a 250% growth in Q4 in its nine-month-old mortgage and loans segment, Square Capital, which contributes 10% to the revenue.

"Square Capital has been the fastest growing for us with a lack of competition in a space that is not yet organised," Shori told ET. "In another three months, we will launch more products around the tech side of this (mortgage) business."

With 400-500 monthly transactions in the space, Square Capital has processed loans worth $50 million in March alone. The company competes with Deal4loans and BankBazaar in this segment.

Square Yards clocked Rs 46 crore (around $7 million) in revenues in FY16 with losses of Rs 25 crore for the same period as per documents with the Registrar of Companies. The company claims a growth of Rs 38 crore (around $5.8 million) in Q4 FY17 with a 103% YoY growth in gross transactional value of over $184 million.

"The incremental target is to achieve $1 billion in gross margin value on an annualised basis which we will achieve by the next 4-5 months," he said. Shori is confident of turning the company cash flow positive in the next couple of months in the international real estate and mortgage business.