Ladies and gentlemen, good day, and welcome to the Aurum PropTech Limited Q3 FY 2024 results conference call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star 20 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Miss Vanessa Fernandes, Investor Relations, Aurum PropTech Limited. Thank you, and over to you, ma'am.
Thank you, Lizanne.
Ladies and gentlemen, the lines of the management have got disconnected. Please stay connected while we reconnect the management. Ladies and gentlemen, thank you for patiently holding. We now have the lines of the management reconnected. Over to you, ma'am.
Thank you, Lizanne. Good evening, esteemed participants, and a heartfelt welcome to the third quarterly earnings call 2024 of Aurum PropTech Limited. It's truly a pleasure to have you all on the line with us today. On this call, we are privileged to be joined by Mr. Ashish Deora, the visionary Founder and CEO of Aurum Ventures; Mr. Onkar Shetye, our accomplished Executive Director; and Mr. Hiren Ladva, our insightful EVP Investments at Aurum PropTech. As we navigate through the financial highlights of the quarter ending December 2023, we will also share some exciting updates on the performances of our businesses. Before we delve into the details, I would like to emphasize that any forward-looking statements we discuss today are accompanied by risks and uncertainties outlined in our prospectus and annual report.
To gain a comprehensive understanding of these risks, we encourage you to refer to these documents available on our website. Without further ado, let's initiate the call with Mr. Ashish Deora.
Thank you, Vanessa. Good evening, everyone. It is my pleasure to welcome you to this 11th earnings call of Aurum PropTech. I wish all our participants a very happy 2024. Continuing in our 3rd year, having committed to bringing technology in the real estate sector, it gives me immense confidence that our purpose of creating an integrated PropTech ecosystem is getting more refined and yielding the desired results. With each passing quarter, Aurum has consistently showcased sustainable revenue growth. Since inception, we have been focused on unit economics and profitability. This ensured that we were sensible with our capital deployment across our products and partner companies. We have our eyes set on three specific PropTech opportunities now in the form of rental, distribution, and capital businesses. Let me talk about the metrics we are targeting for the upcoming quarter.
In the rental space, we are targeting to manage 30,000+ units by Q4. This solidifies our position as the largest residential rental management platform in India. Also, by the fourth quarter of 2024, in the distribution space, our business would have ensured sale of 3,000+ apartments and subscription of 8,500+ CRM licenses. We would have generated 150,000+ qualified leads of home buyers across the country. In the capital opportunity, we would have facilitated INR 600+ crores of real estate investments and housing loans within this quarter. I would like to state that all three businesses are growing with Unit Economics in mind. Moving on to NestAway, at the end of Q1, we set an ambitious goal to achieve profitability for NestAway by year-end.
I am pleased to announce that we have successfully reached this target through our dedicated approach. Our next organic move is to now deploy capital in NestAway to propel the business into a hyper-growth trajectory, aiming to manage over 50,000+ rental units at the earliest. Our resolve to dominate the residential rental market, which is estimated at an annual recurring business of $25 billion, has further intensified over the past few quarters. Moving forward, we are delighted to share that we are EBITDA positive this quarter. It showcases our unwavering commitment to building businesses with profitability and sustainable unit economics. This success is a result of our laser-sharp focus on maintaining EBITDA as a constant North Star metric. From the outset, profitable growth has been our guiding mantra, and this principle will continue to drive our endeavors throughout the calendar year of 2024.
In the past three years, we have diligently expanded our capacities across various business offerings, resulting in sharper business metrics and a more evolved understanding of our industry. Looking ahead, we anticipate doubling the revenues of some of our products in the upcoming quarters, simultaneously also enriching our ecosystem through cross-benefits amongst all our offerings. At Aurum, we are gradually transitioning our journey that began in July 2021, with a strategy of acquisitions and inorganic growth, to now address needs across tech, capital, and services within the real estate value chain. We believe that our ecosystem will benefit the stakeholders in the real estate industry by accelerating tech capabilities. I would now like to conclude by wishing all our participants a very successful year as our country progresses towards the greater glory. With this, I now hand it over to Onkar to talk further on financial achievements and every other detail.
Thank you, everyone.
Thank you, Mr. Deora. Aurum envisions an integrated PropTech ecosystem that creates a seamless digital experience to help consumers across their real estate needs, including buying, selling, financing, and renting, serving as one ecosystem of connected solutions for all the stakeholders and needs of real estate and services related to moving. We have brought this vision to life through a sustained buy and build strategy across three clusters of tech, capital, services, and an integrated data strategy. Each product in our ecosystem achieved a key milestone during the quarter. Sell.Do, our integrated real estate CRM, continues to drive immense efficiency in real estate businesses across the globe and has been ranked number one in the easiest-to-use category by G2.
BeyondWalls, our broker aggregation software, showed a 27% increase in the number of transactions registered on the platform, demonstrating a strong demand for tech-led institutionalization in the real estate distribution business. Aurum Analytica, our data analytics business, showed an impressive growth with 36% quarter-on-quarter increase in revenues and surge in new customers, a stable revenue rate, increased price per unit, and more units sold in the business. Monk Tech Labs continued sustained growth with a 15% quarter-on-quarter revenue growth and 84% net revenue retention in Q2 FY 2024 to Q3 FY 2024. WiseX and Integrow also increased quarter-on-quarter revenues by 3x-3.6x, with the new feature and product launches. HelloWorld and NestAway continue to enhance tenant experience and efficiencies in the rental and property management business. NestAway remains India's top rental marketplace platform by recall amongst rental consumers.
A huge effort went in ensuring customer grievance redressal and brand correction. The team tracked conversations across consumer forums and social media platforms, and now has bettered the consumer sentiment. The sentiment has been better from -35% to +69% in the quarter. The team closed non-operational cities as a part of the restructuring program. The organizational design has also been revamped with right sizing and efficient performance metrics. NestAway 2.0 is now geared up to emerge as the undisputed market leader in Indian home rental sector, with primary emphasis on consumer experience and fortifying supply chain. By 2027, the team is targeting to reach 50,000 homes under management, with a focus on NestAway becoming the ultimate one-stop solution for everyone seeking a home, rental home in India.
Let me start the financial results by underlining that we reported positive EBITDA this quarter with a 37% year-over-year increase. Of the last 5 quarters, we have reported positive EBITDA in 4 quarters. The only quarter reported negative was the Q1 2024, in which NestAway was acquired. This defies the trend of surmounting losses in most technology businesses. In a noteworthy achievement, we are excited to announce that as of December 2023, we have turned NestAway's losses—turned around NestAway's losses completely. This is an astounding feat, considering NestAway was at -85% EBITDA pre-acquisition in June 2023. This was achieved with a 5-step strategy of NestAway clean-up plan. The team rationalized tech and infra costs, redesigned the org structure with focus on right sizing, refined customer acquisition and servicing strategies, addressed consumer grievances, and had a strong redressal mechanism.
This helped us reduce aggressively losses, and at the same time, ensure sustained GTV at INR 41 crores and a net revenue of INR 7.7 crores. Total income for the quarter at PropTech increased by 58% to INR 62 crores. This is a 1.5x year-on-year increase in revenue from operations. A core contributor to sustained performance was residential rental revenue products and platforms, which grew by 2x. Despite an increase in revenue, we are ensuring a tight control on expenditure, which has not increased over the last quarter. The teams are constantly working on ensuring tight control on unit economics with enhanced consumer experience and operational efficiencies. With this, I will now pass on the call to Lizanne, to open the floor for Q&A. Thank you.
Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone wishing to ask a question, may please press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is on the line of Nihar Shah from Crown Capital. Please go ahead.
Yeah. Hello, good evening, sir. My question is regarding the roadmap. We have stated on slide number 22 of our presentation that we have a three-year strategic roadmap. So can you please elaborate on that? Like, what is the roadmap like? What's the growth we are looking at?
Nihar, this is Hiren this side. Thank you for your interest and the question. So, basically, what we have put up on the investor presentation is an indication of what we are working towards in terms of a three-year strategic roadmap. In terms of the outcome, we are finalizing what the outcome will look like, and come back to you in detail in terms of what that roadmap looks like. But at a high level, you know, we are looking at, you know, multiplying our revenue by multi-fold by 2030, twenty twenty-seven, I'm sorry. March 2027 is our goalpost that we have all taken up, from bottom-up, from all different businesses.
The numbers that we have are very achievable numbers in the market, given the way that headwinds are there in the property sector, coupled with the tech developments that are happening, right? But the exact figures and exact roadmap, we will be able to, you know, communicate subsequently. We are not allowed to give forward-looking statements that is prohibiting me precisely to, you know, kind of, give you the numbers. But overall, as I said, we have laid down a path on three specific aspects. One is, what is the top line that we are going to chase? Which, as I said, is a multi-fold from what we are looking at the current revenue. Second is the milestone to achieve PBT level profitability at the consolidated level, right?
So we will also come back to you with the exact quarter that we are gunning and planning for that. And third is the overall business portfolio planning, in terms of which are the opportunities in the PropTech canvas that we see that we should be targeting. And then where we would like to develop our market leadership, and with what you know and how are we able to quantify that leadership, right? So these are the three main, I would say, goalposts that are part of the three-year strategic roadmap.
In addition to Mr. Ladva's statement, we would like to emphasize that we see three large opportunities. One is in the residential rental space, where we feel between the businesses of NestAway and HelloWorld, we should be able to increase our market share and provide a marketplace solution for all rental needs on the residential segment side. The second is in the monetization segment, the CRM and the broker aggregation space. It's where we also see good opportunities coming in. In addition to this, not just the revenue plan, but we have also focused on ensuring how do we increase the...
How do we increase the revenue stack, and how do we ensure that we have cross-platform data integration and better unit economics by leveraging customer across the ecosystem in the PropTech?
Okay, sir. Okay. That was my only question. Thank you, and all the best.
Thank you, Nihar.
Thank you. The next question is on the line of Deepak Singhal from Valtech. Please go ahead.
Hi, my question is, are we focused only on revenues, or what is the plan for breakeven?
So I would like to reiterate that right from start of Aurum PropTech's journey until now, which is from April 2021 to now, we have gone on to aggressively build revenues. But at the same time, revenue has not come at an exorbitant cost of losses, like we see typically in the tech businesses. If we see our last 5 quarters, we have been positive in 4 quarters at EBITDA, and only 1 quarter was at an EBITDA negative, which was in the July, August, September 2023 quarter, 2024 quarter, in the NestAway acquisition. We will continue this approach of ensuring that we grow our businesses, but not at an exorbitant cost of losses.
And we have demonstrated that successively, successfully in businesses like NestAway, where our first milestone was to ensure that we are able to control the losses in that business. And NestAway is a great platform which has got the top recall value in the rental market space, marketplace space. One of the topmost brands in PropTech in India. However, it was at a minus 85% EBITDA negative when we acquired it. And from then to now, we have aggressively gone on to address measures which has controlled, not only controlled cost, but it has brought it to a breakeven.
So yes, we are cognizant about what happens in tech businesses and with respect to growth at the cost of losses, and we will not be taking the same path on growth.
So, to add to what Onkar said, this is Ashish here. This has been a constant sort of endeavor of the company to be very, very prudent and careful about the expenditures and about the losses at all right from very beginning. So, we are happy to continue to be on a very high growth trajectory, but definitely it won't be at the cost of any losses or any cost of cash flow.
Okay, thank you. My next question is: any dates on when we are planning for calling for remaining money for partly paid shares, or as of now, no such plans?
So, again, this is Ashish here. This is something that we are planning to do it within the first half year of 2024. So definitely in next two or three months, this process would have started, and we are looking to consummate the calling of the second tranche of our rights money before June 2024.
Thank you.
Thank you. The next question is from the line of Bimal Panchal from Bimal Panchal & Associates. Please go ahead.
Hello, yeah. Good evening, sir. My name is Bimal Panchal. Congratulations for the excellent results and your this presentations and as well as opening statements are very optimistic and it seems to be realistic. There are lots of questions have been asked by previous questions, so there's no much questions. Call money, you said you are in the second half of 2024, but on this partly paid shares and fully paid shares, there's a spread which is on a large scale basis exist, and always 10-25 INR, 10-15 INR spread is there, which is always in favor of a partly paid. Generally, what happens? People tend to sell fully paid shares and buy partly paid shares. So partly paid remain as...
But okay, not, that is not a lookout from the management, but just my observation. And, my one more question is that, what is the percentage of sales and/or services of Aurum PropTech Limited in total Aurum Group?
Noted, Mr. Panchal. There are two... One was the observation. To your observation, we will not be able to comment as it is a function of market.
Yeah, right.
On the second question, sir, at PropTech, the entire stack of products that we have is on the build side, where first instance is to build a zero to one in that business. Whereas the buy side of businesses or the acquired businesses were at a one to ten in terms of scaling up. Of the entire revenue stack, Aurum PropTech contributed in the quarter INR 1.6 crore of revenue for the in-house products, which were three, you can see Aurum WiseX, Aurum KuberX , and Aurum InstaHome.
Okay, sir.
And, uh-
Mm-hmm.
Just to add on to that, the way we view all these businesses now, no more as, you know, in-house or kind of acquired businesses, right? So they are all part of the way what we are trying to build as the PropTech ecosystem, right? So we don't... And as you would have followed the numbers, all of them are majority stake acquisitions, few of them being 100%, right? So in a way, you know, they are no more, I mean, their period of being considered as an inorganic business, except probably for the recent most being NestAway, which is already nine months old, right? So we no more see them as in-house and outside, you know, kind of acquired businesses.
They are all being part of, or, you know, kind of nurtured as being part of the PropTech ecosystem that we have built.
Okay, sir. Sir, another question: Are new acquisitions smoothly absorbed by the company?
So, the way we bring the businesses into the ecosystem fold is that the management continues to run decisions. They have full freedom to do that. We, at Aurum level, we play an oversight on the corporate development part, on strategic oversight, on governance, risk compliance, et cetera, right? So those are the areas where we play a role. We kind of bind them together in terms of, you know, cohorts and a cohesive joint strategy, right? So that's where this functions, that's how these functions operate. And hence it's, it's actually not really a tough task to, you know, onboard these businesses, right? So they, they continue to, you know, operate the way they used to or they have been, except for, like, necessary, where we had to run a complete turnaround, right?
So which, which is in the positive side, right? So that's, that's some, in our experience, with, with all the-
... you know, businesses that we have brought into the portfolio.
Total number of employees, including of that, of subsidiaries?
Total number of employees.
Employees, employees. 10-digit figure.
Close to 800.
800, okay. And, to understand the corporations and, would it be possible to have some kind of a physical, analysis meet or some, some sort of a facility visit? That will be, better, better for the, analysis with investors. Is it possible?
I think, as the interest level of the research and analyst community has been growing, we definitely are planning event of such a kind. We'll be really honored and happy to have you and host you know investors like you and brief them about our strategy and the way forward.
Because, no, many people are unaware about this company, we instead of this residual business, they still consider a residual business of Majesco. After that, lots of developments, and they are not, many people are not aware, so that will be a midway. Okay, thank you very much, and all the, all the best wishes for the future. Thank you, sir.
Thank you.
Thank you. The next question is from the line of Girish Grimaldi from DF Investments. Please go ahead.
Yeah. Hi, am I audible?
Yes, sir. Please proceed.
Yeah, hi. So quick questions around, first would be the last call we sort of had aspirations of around INR 100 crore revenue in Q4. Just wanted to check the trajectory-wise, do you think you are still on track to do that?
Your question is noted. There are two lenses that we looked at the business from. One is, of course, we now have good control on the unit of growth, where we know exactly where to spend and where to expand. But after NestAway's acquisition, our focus was how do we first control the unit economics and bring out a breakeven in the most premium business in the entire stack? That is where the focus went into. We did observe that, I think there are a lot of inefficiencies that come in when you chase growth at the cost of expenditure.
The first port of call, that is why, was to make sure that we start building profitability in each business, one quarter at a time. And the first port of call has been NestAway, and we'll follow it up. Yes, because of that, our revenue growth has gotten a little calibrated. We would not say that we have, we are shying away from the aspirational number of, of, of revenue that we have, that we have called out. But we have definitely calibrated our aspirations there so that we are ensuring profitability.
Girish, to add to what Onkar said, when we were targeting the Q4 revenue of INR 100 crore, the goal post changed, a bit, after acquiring NestAway. We realized that reaching a INR 100 crore Q4 revenue was, very much achievable, but probably building business for a longer term and dealing with the unit economics at the earliest was, more, more, important, especially in case of NestAway. And that is why we kind of delved into it, and you will, you'll probably, that is why you'll probably, see that in six months, a company which was losing, INR 42 crore-INR 45 crore of annual losses, has now got restructured and has got, profitable in the month of December.
So we did change the goal post a little bit internally after the acquisition of NestAway. And the growth numbers are well. The revenue numbers are on the growth trajectory as well.
Sure, and one more point to add to it is that, despite the calibrated growth numbers, we are still growing at 100% growth over the last year. Our last year was INR 125 crore of consolidated revenue, whereas in this quarter we have reported INR 248 crore of ARR.
Great. Sure, that explains. Another would be if we look at year-on-year number for segment reported, the SaaS software as a service, it shows 9% type of growth. Can you help us understand how exactly you are measuring? Because in general, we would assume that, SaaS as a segment would grow much faster than other segments. Just wanted some color on that.
So, sir, in SaaS, I'll give you a quick form to the kind of calibration we have done in the SaaS businesses also. Our SaaS business stack had two things. One is had got calibrated on two things. One is the revenue stack and the entry of the clients. We have consciously started taking lesser enterprise clients, which bring us larger form of revenue, and we have focused- we have gone on focus on clients with smaller wallet size, so that we are able to de-risk concentration risk of revenue. So that's one calibration that has happened. Second is that we have gone on to add platform or marketplaces on our CRM business.
So, for example, Sell.Do, a great product on the CRM side, we have now added an additional marketplace. I mean, we've, after acquisition, we have added a marketplace model of BeyondWalls. This is a transaction or a marketplace model on the CRM business. So that has got us a larger, I would say that has got us a different stack of revenue, which is more transaction based in a different product segment. The TAM and the TAM remains the same, which is the real estate enterprises or real estate developer and the broker community, whereas we've been able to have a product segmentation in this.
And just to elaborate on the second point, basically what happens with Sell.Do is a developer targeting or real estate developer targeting CRM. Our strategy has been to, you know, deep dive into, as in, you know, double click on the developer community, and that's where both BeyondWalls and Aurum Analytica, as the next line of higher revenue generating products help and cash in on the existing customer set of Sell.Do, right? So that's why we don't see, specifically, you know, probably 100% kind of a growth in Sell.Do. But from the same set of clients, the revenue growth has been much higher in the form of BeyondWalls.
Got it. No, that's understood. In the opening statement, you sort of articulated that you have a three-year roadmap, which you will disclose at some point. But just wanted some qualitative color on that. When you say that you are sort of looking at multifold growth, what is the base we are looking at? Is it gonna be, you know, this year ending revenue? Or what exactly are the parameters you are considering for that roadmap? Just some color.
Yeah. Definitely, it's FY 2024 revenues, the projections that we have, right? So this exercise we did in the last week of December, and, you know, last week of December and the first week of January. So, we had some idea of the Q3 numbers and did some projections on Q4, and based on that, that has been taken as the baseline, right? So the multiple applies on FY 2024 numbers.
Also, add to what Hiren just said, it's also now we feel that the company has over last couple years matured itself to make decision and the discussion within all senior management team to start thinking about a three-year roadmap. And to my mind, that itself was a sort of validation of the maturity that our company and our products and our partners are starting to demonstrate. It was a very, very interesting exercise over two days in Mumbai, in Aurum office.
Got it. And the last one, if you could, you know, we have a lot of information floating around the real estate cycle revival and things like that, right? And typically, it lasts two years, that's what they say. But in your experience as a company, how we are sort of exploiting, number one, the tailwind, which you probably have factored in your roadmap. But in general, what is the delta that you see from last year to this year versus going forward in terms of tailwinds, if you could sort of again, some qualitative commentary, specifically in our context?
So, you know, what you hear and see in the market, at the high level metrics, two things are being tracked, right? What are the transaction closures? And second is, what are the investments which are happening in the real estate sector? Now, earlier, as you would have heard from, Mr. Ashish, how we are focusing on, the three opportunities. The last two being the distribution opportunity and the second, the third one being the capital opportunities. And so these two are directly linked to, you know, the heightened activity that we are seeing in the, overall property sector, right? In the...
In our distribution businesses, what we do is we essentially first enable real estate developers to take their products to the market, to their home buyers, specifically, you know, through, you know, two, three businesses that we have, which could be in the form of, you know, getting them potential home buyers as qualified leads, or in terms of digitally managing their transaction journey, and third, definitely the CRM, right? So that's one area that we see a good, you know, kind of further revenue coming in, in terms of more demand for, you know, both qualified leads as well as the transaction support. So that's the first area of opportunity.
Second is in terms of the investments which are happening in the real estate sector. There are both institutional investments, which are, you know, very high ticket sized investments which are happening. Then there are, you know, HNI who are willing to participate in this journey, right? That's where our investment platforms, which are part of the Aurum WiseX, as well as the Integrow asset management company. We feel that there will be a higher interest from the investor community to participate in the real estate story....
And there are many more reasons also behind it, and a lot of credit also goes to things like, you know, RERA and, you know, SEBI being been absolutely supportive in terms of bringing regulations to give comfort to the investors, right? So these are some of the things which are, which we have started seeing in the last couple of quarters in terms of investor interest in these kind of products, right? So, so that's something that we are banking on, as far as the tailwinds are concerned. I'll also take an opportunity to do, you know, kind of talk about the space which doesn't get talked so much about, in research reports and et cetera, which is the, which is the rental opportunity, right?
So, you know, that, that's something that's going to be, focus area specifically. And then the moment we have more supply and, you know, just, this week we were looking at, the kind of inventory that is being by is there with the developers. Which means that the occupancy of, you know, the houses which are getting constructed is rising. That means, you know, the rental market is also going to thrive, and that's something that's going to help both our NestAway as well as HelloWorld business, right? So while it doesn't get talked about directly, that's something that's going to benefit us tremendously as a business.
Got it. That, that was quite helpful. And if one last one I can squeeze in, which was connected to what you just said. Can you help us understand who would be our top competition? Each of the segment they would be different, but just broadly, if you can call out a few names and how we differentiate ourselves. Because to be honest, we, we do hear a lot of names on TVs or digital media and things like that. Probably our presence is minimal at this point, but it would be beneficial for, you know, us to understand your viewpoint, who do you see as competition and our positioning?
Yeah. Let me, you know, it will take me a lot of time to go through each business' competition, but I'll focus on maybe three or four of them. So let's say, if you look at HelloWorld as a co-living business that we have, now we are the third largest in terms of capacity and second largest in terms of revenue, in terms of co-living business in India, right? As far as HelloWorld brand is concerned. Our, you know, within the top three, possibly are Stanza Living and Zolo Stays, right? So these two are the immediate competitors in the space. I'll encourage you to research more. I will not elaborate in the interest of time. Similarly, for NestAway, practically this is the only digital family rental platform that is there in the country.
If you have to see a very lookalike kind of a model, it's there in Brazil. It's called Quinto Andar. You know, I would say, that's the only business that comes closest to what we are building. Having said that, within the rental opportunity, yes, you would see players like NoBroker as prominent players enabling the rentals, right? So that's the you know, second line of business. Now, as far as the CRM business is concerned, which is Sell.Do, we are the largest real estate-focused CRM in the country.
Practically there is nobody who comes close to, not just the revenue, but also in terms of number of clients that we have, number of licenses that we, you know, sell under this business, right? So that's... we are a clear market leader as far as real estate CRM is concerned. Second business I can talk about is Aurum Analytica, which is a data science-enabled, you know, sales and marketing automation service that we provide to the developers, through which we are able to sell highly qualified leads to developers. I would say we are at the top of the pyramid in terms of, you know, the quality of leads that we sell, right?
There are larger players who sell, you know, just leads, which may not be really that highly qualified. So those kind of players constitute people, you know, platforms like 99acres and Makaan.com, right? So those, those would be our, I would won't say direct competition, but yeah, you can say they, they kind of target the same share of volume.
Got it. Thank you so much for patiently answering. I might have some more queries, but I'll reach out offline. Thank you so much, and wishing you all the best.
Thank you so much. Look forward to your query.
Thank you. The next question is from the line of Pranav Mashruwala from Dolat Capital. Please go ahead.
Yeah, hi. Am I audible?
Yeah. Yes, sir.
Yeah, hi. So, this is in continuation with the value creation three-year strategic roadmap. So now we have about 14 products spread across various verticals. So, do you think that given these set of portfolio of 14 products we can achieve this three-year strategic roadmap? Or do we have space for, or do we plan to have a few more products that can take us beyond the INR 100 crore target that we have set out? Any white spaces that we need to fulfill to get to a larger aspiration?
Mr. Pranav, thank you for that, you know, insightful question. Yes, you know, the three-year roadmap that we are building is based on the assumption that we will continue with only these products at the moment. So that's our phase one of the roadmap. I would say, phase zero of what we started building as a roadmap. We had undertaken our own in-house study on what the prospect canvas would look like over the next, not just three years, but all the way till 2030. So definitely there are some spaces that we could enter in future, but I would say not in immediate future, right?
So with the current, I would say one- or two-year horizon, I think these 14 products are something that we would want to focus on, build them in a very profitable way so that, you know, and target leadership across the specific segments that they are in. So that would be our immediate focus. In the journey, we are not completely closed to looking at opportunities that could be added on, but we'll be very selective in terms of what adds to the overall ecosystem play or the competitive advantage we could get out of those kind of acquisitions, right? So that's in terms of adding on to not just products, but also, you know.
Just on the customer piece, so we have about 16,000 customers in RaaS and 530 customers in inaudible. How are the retention rates for these?
So when we look at, you know, 16,000 customers in the rental side of the business, what happens is, instead of retention, if I could talk about how, you know, they typically stay with us on an average anywhere between nine to 12 months, right? And why I'm using a range is because we have one co-living business and then a rental business. In rental business, the average tenure is slightly higher. In the co-living it is close to eight months, right? So that's the longevity, because that's the young generation, which is, you know, I just think as just fresh out of college, and, you know, is very agile in terms of their, you know, living choices, right?
So that's the, you know, kind of nature of customers we have. Having said that, we did an analysis around a quarter back, around 30%-40% of clients, tenant clients are there with HelloWorld, which have been there for more than two or three years or so, right? So that's also a case that we have. In terms of our SaaS products, the retention rates are upwards of 90% that we have. Right? So overall, you know, customer retention number that we are tracking.
And so one of the just, basic back of the envelope calculation comes out, about 16,000 customers on FY 2023 revenue. Per customer we earn about INR 65,000. So just slightly less than INR 66,000, per customer, and for RaaS it's about INR 400,000. So, is there any way we can improve upon the realization per customer?
Within rental, what I think, what we internally do is that we split the, from a revenue realization point of view, we split the RaaS customers into the two segments, which is co-living and the actual rental. Simply because in co-living, we are able to, for various taxation point of view, we are able to recognize the entire rental revenue, whereas in case of the rental segment, we recognize the tech platform revenue, right? Where there is a sizable difference in the revenue per customer in that way, right? But roughly you can say that co-living customers, which are roughly 50% of the 16,000, I would say 60% of the 16,000, are giving us an average monthly revenue around INR 12,000.
Whereas, the rental customers would be giving somewhere around INR 3,100 per month. That's the revenue realization that we get from these customers. And, for the SaaS, I think it's fairly easy to calculate because, similar, you know, ticket size across both the products.
So in addition to what Mr. Ladva said, there's an active effort to ensure that we are increasing the wallet share of our RaaS and SaaS customers both. We have gone on to now form cumulative LPEs across every consumer that comes into any neutral point of our ecosystem. Then ensure and ensuring that the strategy is to make sure that we are able to move one consumer to other by forming consumer cohorts. So that's one initiative that we are running in actively.
The other initiative on SaaS is, since we will rather be able to increase the number of active customers in SaaS, because the stack of revenue here is now moving from enterprise to more of a mid-segment kind of a customer category. So that these are the two active initiatives that we are following to increase this metric.
Okay. That's it from us, right? All the best.
Thank you.
Thank you. The next question is on the line of Agastya Dave from CAO Capital. Please go ahead.
Hello, am I audible?
Yes, yes, that is clear.
Thank you very much for the opportunity, sir. A lot of the questions got answered. Sir, just couple of doubts that I have regarding the properties that you have created. So just going completely by eye test, if I go through HelloWorld and NestAway websites and I go through the listings, I see that the listings are concentrated in very few cities, right? Bangalore definitely dominates, Kota dominates, some areas of Bombay dominate, Pune also dominates. So geographically, to me, it looks like you are still very fairly restricted. You have not spread out completely, yet you have entered into a phase where you are trying to rationalize the costs and control the costs, which I really appreciate.
Now, sooner or later, you will expand geographically, and also in the geographies where you're currently concentrated, you will try to expand in those geographies. That's the most logical thing to do, right? So what will happen to the cost structures? Will the cost structures not go haywire once more? Or is there a way to keep the lid on the cost structure that you have done as of now and still grow? Is that possible, or will we see another spike in costs going forward?
So, Agastya, partly you have answered that question itself, but let me, you know, attempt it anyway. So see, as far as HelloWorld is concerned, we have, and this again linked to our, you know, three-year strategic roadmap. We have made certain choices, and one of those choices is that as far as HelloWorld is concerned, we'll focus on, you know, the top 15 cities.
Okay.
Actually being present in a limited number of cities and having a micro locality focus has actually enabled us to get very, you know, good operational efficiency. And how that happens is because we are able to have, you know, one tenant movements. We are able to offer them tenant, offer the tenants movements across our, you know, micro localities. That's the typical, you know, transitions that we see within city, right? So one is we are able to cash on to that. Second, we are able to optimize our teams which are servicing these properties, right? So our entire, right from the operations to sales teams, we are able to, you know, optimize. And that has been our learning with HelloWorld, even before we acquired NestAway, right?
So, that way, you know, the strategy is very clear as far as, you know, the choice of cities is concerned. We believe that, you know, this top 15 cities is where a lot of, you know, services, job generation is going to happen. A lot of education centers are going to become as, you know, kind of concentrations, in terms of, you know, universities and colleges. So we see both, you know, the student living demand coming from the cities, as well as the, you know, the young workforce which is moving to metros, right? So that's something-
Right.
That we feel is going to help the HelloWorld business. Now, similarly on NestAway, your observation is bang on as far as both the websites are concerned, because in NestAway, one of the levers of cost optimization was also on a similar line, which is to, one, ensure that we have operational efficiency. And all the more for NestAway, you need to have, you know, a platform running where both your demand and supply are in tandem, right?
Mm-hmm. Mm-hmm.
With that learning in mind, what we did was immediately to exit cities which are, you know, less than, let's say, 200 set of properties that we have, or I would say 200 set of tenants, not properties. Now that, with that, we actually did away with more than 2,000 properties or 2,000 units that we had on our platform. We had to, unfortunately, you know, kind of take the tenants out of the system, but that has been done because we were able to remove the entire presence, the cost, the fixed costs that are there in those cities and et cetera, right? So that's something that has helped us. Now, when do we plan to go back to the cities? I would say not in the next one or two years.
And hence-
Okay.
We feel that within this one or two years, we would be able to build that, you know. And then see, when you look at from a tenant point of view and when you are seeing this platform, you would also want to see a wide number of options available to you as a tenant, right?
Right.
To do that, we have to concentrate on some of the cities, and that's what we intend to do, as to build supply within this set of cities, and the tenants will naturally come, the moment they start seeing options.
Got it. So, sir, in the 15 odd cities, if I again take HelloWorld and NestAway together, in their respective segments, in these 15 cities of focus, so to speak, what kind of market share can you get? Because as of now, the market is extremely fragmented. So, the macro analysis that you have done on the property segment and on the PropTech side, that's, yeah, that's I completely agree. It's a huge opportunity and it's going to grow dramatically going forward. The only thing is that the market, unlike other such services and products and platforms, this is extremely fragmented. So, how... First of all, what is like targeted? The TAM is known, but what kind of market share can you get in these 15 cities?
Right. So, as far as the organized student living market is concerned, right, so we are already having a, you know, market share of close to 20%, right, with HelloWorld itself, and I'm not counting NestAway in that, right? So, the organized, shared living market, which includes, you know, the new gen set of players that are offering co-living solutions, that in itself, we have a market share of 20%. Now, what is the share of organized in the overall student living? I think it would be, it will be a very small fraction if you look at the entire India story. Why? Because-
Right.
There are, and then, you know, that's why you're talking about the TAM, right? So this, that's-
Right.
So roughly, I mean, the numbers are out of the way, INR 35,000 crore rental market in India, only out of student living. Right?
Right. Right.
So, we are actually competing with the PGs and, you know, individual houses which offer, you know, either a single room or a set of rooms to students at a very, you know, kind of affordable way.
Right.
But what is helping, and I think, there has been an article in one of the media, you know, kind of daily journals, The Ken, just today itself. I would encourage you to read it. Is that there is a significant trend which is going towards people wanting much better accommodation for their students and even not just students, even freshers, who just out of college are joining their first jobs. And some of us would be, you know, those engineers and, you know, kind of, graduates who moved from a small town to cities like Bangalore or Mumbai or Pune, and would have gone through those struggles living in hostels and PGs and et cetera. And we would be able to relate to, you know, so to say, the pain that we have gone through.
You know, that is where the organized play players are actually delivering value to this, not just students, the freshers, but also the parents who get a, you know, tremendous peace of mind that their children are sitting in a very, very nice, comfortable place in, you know, houses and accommodations. So that is where a big shift is happening. Roughly, if I were to give you a guess of, you know, as of today, there is a capacity of more than, you know, 3-4 lakh beds in the organized segment itself, right?
Right.
So that's going to grow, and that pie is itself going to grow, and that itself is going to help us grow, is what we feel.
Right. So I have a lot of questions, but I think I'll wait till you come out with your strategic roadmap. What is the tentative timeline for that, sir? Will you be coming out for next during next quarter?
Yes, we intend to, you know, finalize it in the quarter which is ensuing right now, right?
Right.
There is a lot of follow-up activity which is also happening, which will conclude in the next week or so. And we intend to, you know, start the, you know, internal not just communication, but socializing with every team member of the ecosystem, right from the CEO to the frontline people as to, you know, what our goals are, and et cetera. So that's going to be an internal communication exercise going on the next two, three months. Right. So-
Great, sir. All the best, sir. Thank you very much for answering the question, and, I'll quiz you next quarter then. Thank you, sir.
Thank you, sir.
Thank you. The next question is from the line of Faisal Hawa from H.G. Hawa. Please go ahead.
Sir, we have been also developing our own products, you know, in AI and, you know, for different applications. So, have you had any progress in being able to develop any kind of product which will yield good revenues from us, for us? And sir, what about the fractional ownership company, Integrow? Is that also making some good progress?
So, I think I was not able to get the first question, which is last part. I understood the own products thing. Can you please repeat the first question?
Yeah. So we were going to develop a lot of products using AI, and also, you know, to solve various other pain points of the real estate industry. So have you made any progress with our own products as yet?
Right. So there are two sets to it. One is that we are building our own products, where we see ancillary opportunities with the existing businesses. And second is that we are focusing on building features which are new-gen. So AI, blockchain, marketing automation, all of these features are being developed and shipped out of our individual products like Sell.Do, NestAway, and Analytica. So this is a constant feature update that we go on to roll out quarter-on-quarter. So that is already happening. On the fractional ownership side, we waited out patiently for the regulatory environment to give clarity on the way of going about the fractional ownership business in an institutionalized format. We see two parts to it.
One is the financial instrument, which is with our business, Integrow. And the other part is, of course, the velocity of monetizing that financial instrument, by the way of having retail distribution, where we see WiseX playing a crucial part. Both have done their GTMs in creating financial instruments and creating an entry of retail investors who will be a part of the fractional ownership ecosystem. We are... I think we have got the components in place, and both have done their GTMs in their own formats.
So we are just waiting for regulatory approval?
Yeah, and, Faisal, this is Ashish. And now with the clarity from SEBI, I think it's a very pragmatic regulation that SEBI has now approved. And with that, we are now launching the first fractional ownership asset next week through Aurum WiseX. It's I think a INR 70 crore opportunity, which is being marketed from next week in a pre-leased transaction, pre-leased asset in Pune. So yeah, as soon as we got that clarity, we didn't want to kind of do it when there was this sort of a gray scenario. Some players opted to continue doing the fractionalization in this period.
But we made a conscious call that we will wait for how the regulators view this whole thing. And we have had a very pragmatic regulation of that. And we have started the fractionalization again, and you will see one asset being launched next week itself.
So basically, this INR 70 crore asset has a leaseholder already, and it will be now sold on our platform to our retail investors whom we are already having. So it is that formally we are now doing it on our platform?
Absolutely. And there are some new retail investors also that come in with every opportunity. So we have, over the past, I think 1,100 retail investors that have participated in through Aurum Bytech. And we will see some of them to come back in this INR 70 crore opportunity, and some of the new ones will be joining as well.
This INR 70 crores would yield around, like, say, around INR 2-3 crores as fees for Integrow?
This will be from, this will be in Aurum Bytech. The fee of Aurum Bytech we'll discuss with him, but yes, I think you are at the ballpark number, that what is the fee. It will be, it will be in that range itself.
But this company is also part of Aurum PropTech, yeah?
Yeah, yeah. It's a 100% subsidiary, and the fractional business is being now run by Aurum Bytech team.
We have, like, enough such properties coming on, you know, that we can launch probably every quarter or so, then that's not the right statement.
Yeah. The property TAM is quite large. On the supply side, we have enough pre-leased properties which can come onto the platform once the first launch is demonstrated successfully.
Thank you for answering so well, and I really appreciate the performance of the company.
Thank you, sir.
Thank you. The next question is from the line of Rahul Hiren from Dolat Capital. Please go ahead.
Hello. Can you guys hear me?
Yes, we can.
Yeah. Yeah, thanks for the opportunity. I know this has been discussed to some degree, but still, I'll take an attempt to understand it in a different way. Regarding the NestAway business, of course, we have done a good execution in terms of the roadmap of bringing it to a breakeven point. But in terms of scaling it back to the potential that the business carries, what could be the kind of investment that may go into it? Because on the consumer side of it, driving the traction would need a push from performance marketing side or any other strategy that you might have. We would love to hear from you.
So now that it's Ashish here. As a first step, we wanted to make ensure that there are no losses in NestAway. We have achieved that in the month of December. We would like to see that in the upcoming quarter, a similar trend is sort of observed. We don't want to get too excited about this whole thing now. We want to go a little easy on this. But, having said that, the immediate target is to take it back to 50,000+ beds that were being handled by the platform earlier. As of now, we are at around 11,000+ beds at NestAway.
To take it to 50,000 beds is almost 4-5 times of the growth that we have to achieve there. This is a commitment that we have made internally. Having said that, we would also like to hereby say that, when we acquired NestAway, the idea was that there were two pools of capital. First pool of capital was the acquisition cost of INR 90 crore, and the other was INR 80 crore to stabilize the company and grow the company. Over the last 6 months, we have only put, like, a couple crore in the business.
All that INR 80 crore that we had initially provided for to grow the business and to stabilize the business has not been taken by the management of NestAway. And they have been able to manage from their internal accruals, which is the discipline that they brought to the business. So I think we have the growth capital in place already, and the growth target of getting back to 50,000 beds is already in place as well. This company has dealt with the capacity of 50,000 beds earlier, so that should be the next big stop for NestAway.
Right. Just one extended thought on the same thing. Since the first objective, as you rightly said, was to make it profitable, and now you have a goalpost which is a much larger number than your current run rate. So, will it be a very balanced approach of like like annually annual breakeven plus growth kind of a model? Or you would say that once you have to accelerate, you may again go back in the red and keep come back in the green once you know you achieve a certain scale, or this will always be like self-funded kind of a growth, and we may keep the balance at zero from at least zero, which limit?
So hyper growth does come with some sort of expansion of capacity, and whenever you expand capacity exponentially, it does take time to fill that, fulfill that capacity. So anytime you, our experience in last three years in the corporate business is that anytime you want to kind of increase capacity, you will have one or two quarters of a little bit of challenges, because you have kind of contracted beds, you have contracted team, and you still need to kind of expand and fulfill. So, that cycle will be there for sure.
But having said that, as we have demonstrated over last 11 quarters, we will be extremely careful about where the investment is being made, where the capital is, capital is being deployed, where the unit economics is failing, if it is, and we will definitely not mention it.
Just as a reference, Mr. Hiren, one partner that we can give, one of the largest co-living companies in the country is doing INR 115 crore kind of an ARR, but their losses are at INR 572 crore for the year, for the last year. So growth actually also comes at certain strategic choices and metrics that you define on the supply and demand side. And you can compare our numbers of HelloWorld growth. We are at INR 100 crore plus revenue, but with a marginally negative number.
Got it. That's quite helpful then, thank you.
Thank you. The next question is from the line of Nikhil, an individual investor. Please go ahead.
Hi, thank you for the opportunity. You know, just on NestAway a little bit more. You mentioned that, you know, on for one of the previous questions, that geographically, you are not looking to expand anytime soon. So where, where is the capital infusion then going to be used? And, you know, for the short term, let's say one or two years, what's your plan in terms of growth for NestAway? What are you looking at, you know, some of the low-hanging fruits that you possibly want to kind of convert as before this point?
So, within the this hearing year, within the cities of choices for top, five or six, cities, we will be investing in getting acquisition on both the sides of demand and supply, right? So here, it's a platform business, so, you know, there is a home owner also we need to target, and there is a tenant also we need to target, right? So, so, so our marketing efforts, our customer acquisition efforts would be in that direction. There is a, I would say, not a very significant, but there's a small cost in kind of continuing, continuously upgrading the platform with newer features that will help both homeowners as, as well as the tenants in their, respective journey of, you know, finding the right property or listing the right property for the homeowner, right?
So, partly on the tech and the product development side, and probably 3-4x the investment in the product and tech would go behind customer acquisition, which includes branding, marketing expenses.
Perfect. Okay. Just a couple more questions on this. When I was looking at the number of units or the number of beds per se, it's kind of decreased over the last, you know, couple of quarters. I understand that, you know, this would possibly be one of the measures, as you mentioned, in order to kind of improve the profitability metric. But internally, what do you target over the next, couple of years, one or two years, to say so?
If I were to just give you the number of both HelloWorld or, or rather only NestAway, as we have said, it's going to be a journey towards the 60,000 units by 2027. As far as HelloWorld is concerned, we are looking at somewhere between 25,000-30,000 beds at maximum.
Okay. Okay, and just one final question on NestAway. Of course, there's a lot of talk, you know, outside as to, you know, that business, the kind of brand that they have right now, and there were a few struggles when it comes to services, et cetera, as well. With a lot of tenants, you know, not having that kind of trust anymore, owing to previous difficulties. For you, what do you consider as key metrics or, you know, key areas to solve for that business? And, moving forward, when it comes to brand and, you know, just that brand equal kind of a metric, how are you looking to kind of address that?
So our journey in addressing that had already begun from day one of the acquisition, wherein, there was an entire, I would say, kind of a war room set up to take care of all the prior customer, you know, grievances and entire, you know, kind of team was set up behind one addressing and kind of bringing closure to some of those, you know, discussions that we had, right? So, that is one thing that has happened. Specifically, yes, the digital negative content, which Onkar had already talked about, right? So that is something that we have actively taken, you know, having them be satisfied, you know, getting the satisfactory rating from the customer, we have been able to improve overall ratings of NestAway tremendously, right?
There were, I would say, a few, not many, you know, kind of, you know, specific articles or, you know, kind of interested, articles which were kind of created to malign the brand reputation, and we have taken corrective action on some of those as well. So, it's been a multi-pronged approach already, and we are continuing that effort in terms of, you know, building, you know, the brand presence, focusing on SEO, focusing on the all possible ratings that could impact, you know, the customer experience and the tenant experience, right? So even platforms like MouthShut, Justdial, Trustpilot, et cetera, right? So this is where we have actually seen, you know, the proof of, proof of the pudding is in the ratings that have got improved, right?
So, our MouthShut ratings has gone up from 1.7 before acquisition to 4.1 now, right? Even Justdial, which actively people refer to for rentals, within Mumbai itself, it's gone up from 1.8 to four. Similar number we have in Delhi and Pune, right? Somewhere around four for all the cities, right? So that's, that's the, you know, these are things that help a tenant to find the right information, the right feedback about a property, so that's something that we are doing. There are a few rebranding initiatives which are under the hood, which we will be launching in the coming months and quarters, right?
So you would see a fresher NestAway brand in the market, which will, you know, just to disassociate us from the, you know, the prior or the past, unfortunate years that NestAway had to go through. But I think we're, we are past that, and we'll, we'll, you know, continue to focus on customer experience throughout the journey.
Mm-hmm. Just one last question here. Considering, you know, all of these steps that you're taking, are you seeing any kind of increase, per se, in the customer acquisition costs? Could you perhaps quantify that a little?
I'll have to come back on the exact number. But I, my rough sense is that, you know, given the way the overall PNL looks at NestAway, and the very fact that despite us giving out the, you know, the other, 7, 8 odd cities from which we exited, and despite that, the number of tenants that we have with us have remained the same, right? It kind of gives me an impression that the CAC costs have not gone up significantly. In fact, they would have stayed either the same, right? I, I'm not, you know, kind of-- That's not been a worry for us, certainly.
Mm-hmm. Understood. Understood. Well, thank you a lot for that, and good luck with your journey.
Thank you, Mr. Nikhil.
Thank you. Ladies and gentlemen, we have a few more questions in line, but due to paucity of time, I now hand the conference over to Ms. Vanessa Fernandes for her closing comments.
Thank you, Lizanne. Looking at the increasing participation on our call, it's just another testament to the growing interest in our endeavors at Aurum PropTech. This level of engagement and these insightful queries are integral to the collaborative dialogue we value at Aurum PropTech. Looking forward to this continued support. Thank you, and have a great evening.
Thank you. Ladies and gentlemen, on behalf of Aurum PropTech Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.