NestAway eyes fresh funding, public listing after profitability
Bengaluru-based rental start-up NestAway, which caters to tenants, mainly from the 22-30 age-category, is now planning to raise around $40 million funding. This Tiger Global-backed online start-up was valued at $110 million in its last round of funding and has plans to go public within five years, according to its Chief Executive Amarendra Sahu. Here's all that you need to know about it.
NestAway was founded by Amarendra Sahu, along with Smruti Parida, Deepak Dhar, and Jitendra Jagadev in 2015 and has raised around $40 million so far from Flipkart, Russian billionaire Yuri Milner, industrialist Ratan Tata and VC firm IDG Ventures Indid and Tiger Global. Chief Executive Amarendra Sahu said, "We are looking for a similar amount or upwards of it," in an interview with Reuters.
The start-up manages establishments on behalf of their owners and charges a 5-30% commission on the rent given by the tenant, depending on the amount it spends to furnish a house. The tenant has the provision to rent a room or the whole house. NestAway manages 11,000 houses, has over 30,000 tenants and has reportedly raked $40 million revenue in the last fiscal year.
NestAway, which employs around 450 employees, however, is not profitable yet and has a high cash burn rate of under $1 million a month. However, Chief Executive Amarendra Sahu is confident that they "will break even in the next eight quarters." The firm has recently acquired the home aggregator and rental management company Zenify, which maintains its separate identity under the brand.
Chief Executive Amarendra Sahu had previously said to YourStory, "We are already gross-margin-positive, making money in every transaction. Since repeat transaction is inbred into the product, break-even and profitability will soon follow." Sahu has plans for bourse listing and a NestAway IPO, post profitability, "But, to hit the market, break-even is not a great story, you need to throw some money on the table."