NestAway, an Indian PropTech startup once valued at over $225 million, sells itself for just $11 million

Technology startups are currently facing challenging times due to the ongoing global economic slowdown, rising interest rates, and geopolitical risks. These headwinds have created a difficult environment for the growth and sustainability of tech startups.

Furthermore, the first quarter of 2023 has witnessed a significant decline in venture funding, marking the fifth consecutive quarter of such decline and reaching the lowest level seen since 2019. This contraction in funding has created a challenging landscape for many startups, as they face increasing difficulties in securing the necessary funding for their next phase of growth.

As a result, some startups have resorted to selling themselves to other startups operating within the same industry or sector. The current market conditions have intensified the pressure on startups to adapt and navigate the funding landscape in order to sustain their operations and drive future growth. The latest example is NestAway, a once high-flying Indian PropTech startup that ultimately decided to sell itself to Aurum for about $10.9 million, another startup operating within the same space.

The deal, which signifies a substantial decline in value for the investors of the startup, reflects the challenges faced by NestAway in navigating the current market conditions and highlights the trend of startups opting for consolidation and partnerships to ensure their sustainability and competitiveness in the industry.

Prior to this deal, NestAway has gone through turbulent times. In July 2029, co-founder and former CTO Smruti Parida left the company. A month earlier, co-founder Deepak Dhar also quit the startup to start up his own fintech venture.

Over the years, the eight-year-old NestAway managed to raise $115 million in funding, with a valuation of $227 million during a funding round in 2019. Prominent investors in NestAway include Sequoia Capital India, Tiger Global, Goldman Sachs, Yuri Milner, and Chiratae Ventures.

Aurum, having previously acquired a NestAway unit for approximately $6.8 million, announced its intention to invest $3.6 million to stabilize NestAway’s business. Aurum expressed confidence in India’s $20-billion Rental Housing market and viewed this capital infusion as a testament to their conviction, as stated in a filing with the stock exchange.

The impact of the Covid-19 pandemic can be partly attributed to the decline in NestAway’s value. The company’s revenue dropped to $3 million in 2022, a significant decrease from the $9.5 million reported two years earlier. Prior to the pandemic, NestAway’s platform featured 50,000 properties, but this number was reduced to 18,000 due to the challenging circumstances caused by the pandemic.

In a statement, NestAway founder Jitendra Jagadev said, “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, becoming a trusted brand in the PropTech industry.”

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• Source: https://techstartups.com/2023/06/02/nestaway-an-indian-proptech-startup-once-valued-at-over-225-million-sells-itself-for-just-11-million/