NestAway to raise $40 million
NestAway Technologies Pvt Ltd, an Indian online home-rental startup funded partly by U.S. hedge fund Tiger Global, is in talks to raise north of $40 million, the company’s Chief Executive told Reuters.
NestAway has raised about $40 million from three funding rounds so far from investors including Indian e-commerce company Flipkart , Russian billionaire Yuri Milner, industrialist Ratan Tata and venture capital firm IDG Ventures India.
“We are looking for a similar amount or upwards of it,” Chief Executive Amarendra Sahu said in an interview.
The last funding round valued NestAway at $110 million.
The company, based in Bengaluru, formerly Bangalore, plans to go public within five years, Sahu said.
Sahu, who has a degree from the Indian Institute of Management, Bangalore, has worked at Cisco Systems Inc, Juniper Networks Inc and Alcatel-Lucent.
He and three of his friends from engineering school hit on the idea of starting NestAway after finding it difficult to rent homes easily in Bengaluru.
In 2014, they furnished one of their own houses, took some pictures and put it up for rent on a social media platfrom. The house was booked in a day.
NestAway was born in 2015 and raised its first round of funding three months later.
The company now manages properties on behalf of owners in seven Indian cities. A user of the NestAway app can rent a house online and also use it to pay rent or avail plumbing and other services provided by the company.
NestAway charges a portion of the rent as commission – between 5-30 percent depending on how much it shells out to furnish the house.
The company, which has over 30,000 tenants and manages 11,000 houses, earned $40 million in revenue for the fiscal year ended March 31. It currently has 450 employees.
NestAway is not profitable yet and has a cash burn rate of under $1 million a month, Sahu said.
But he expects the company to start earning sustainable profits after about three years, allowing it to begin prepping for an initial public offering of its shares.
NestAway plans to list on Indian bourses.
“We will breakeven in the next eight quarters,” Sahu said.