Aurum buys Ratan Tata-backed NestAway at 95% valuation cut

Aurum PropTech will acquire a 100% stake in Ratan Tata-backed house rental startup NestAway Technologies for up to ₹90 crore ($10.9 million), about 95% lower than its previous valuation of $220 million in 2019.

NestAway has so far secured cumulative funding of $110 million, garnering investments from marquee investors such as Tiger Global, UC-RNT Fund, Flipkart, Goldman Sachs and Yuri Milner. UC-RNT Fund is co-managed by RNT Associates, Ratan Tata's personal investment vehicle, and the University of California.

In addition to ₹90 crore for the acquisition, Aurum PropTech will inject ₹30 crore to stabilise the business. "This capital infusion in NestAway is a testament to Aurum PropTech's conviction in India's $20-billion rental housing market," the publicly listed company says.

Reacting to the deal announcement, shares of Aurum Proptech jumped over 10% to ₹134 apiece on the BSE, taking the company's market cap to ₹362 crore.

Aurum had earlier acquired HelloWorld, a unit of NestAway, for about $6.8 million.

"After successfully scaling up HelloWorld's operations within a year, Aurum PropTech has strategically acquired NestAway," the company says.

The founders of HelloWorld, Jitendra Jagadev and Ismail Khan, who were originally part of the founding team at NestAway, will now lead NestAway after the acquisition. The company appointed Jagadev as the chief executive officer and Khan as the chief operating officer of NestAway.

Founded in 2015, NestAway leverages technology and data to streamline property search, scheduling visits, rent payments and service requests for homeowners and tenants. NestAway claims it offers a comprehensive solution as an intermediary for every step of the home rental process.

Before the Covid-19 pandemic, the startup featured 50,000 properties on its platform and achieved an annualised revenue of ₹100 crore. Currently, NestAway features 18,000 properties on its platform and has an annualised revenue of ₹30 crore. Nestaway recorded revenues of ₹25.43 crore in 2022, ₹52.05 crore in 2021 and ₹78.27 crore in 2020.

"When we started NestAway, our vision was to revolutionize the way people live in cities by providing them with convenient, affordable and hassle-free housing solutions. Over the years, we have grown and expanded, serving thousands of customers," says Jagadev, founder of NestAway.

"Aurum PropTech is the perfect partner to fuel our growth and help us realise our vision on an even larger scale," Jagadev adds.

According to the filing, the acquisition will add to the consumer tech segment of Aurum and is in line with its strategy to create an integrated PropTech ecosystem. The completion of the transaction is expected to take place on or before June 30, 2023.

"NestAway's tech driven revolution in the rental housing market is in perfect accord with our mission to revolutionize the residential rental industry in India. Under the leadership of Jitendra and Ismail, we are confident that we can replicate the remarkable success of HelloWorld, taking NestAway to even greater heights," says Ashish Deora, founder and CEO of Aurum Ventures.