Rohit Malik, a hedge-fund veteran who has had stints in the US and India over the past two decades, believes in hunting for opportunity in the midst of a crisis. The bigger the crisis, the maximum is the return. Take, for instance, the gloomy data on real estate: Unsold houses are reportedly at an all-time high of 12.76 lakh in India’s top 30 cities. Malik, who turned entrepreneur in 2017 when he started online real estate marketplace Clicbrics, stays undeterred, and sees a silver lining: Smaller cities.
“I don’t believe there are no buyers. There is a buyer everywhere,” says Malik, who raised $3 million in a pre-Series A round from a consortium of global marquee investors such as Manny Singh of Kavi Fund, Peter Mann of Gluskin Sheff and a bunch of HNIs from the US and Canada early this week. “People argue that the real-estate market has hit dead end, but I totally disagree,” he says. Excerpts from an interview with Forbes India
Does the real estate market look gloomy now?
It’s interesting. People say there are no buyers, but I don’t think so. There is another way to look at things. For instance, an ophthalmologist might not get too many patients because people are not serious about getting their eyes examined, but a cardiologist could be minting money. So it matters how you are doing business, and where you are going to catch your potential customers.
There is no reason to be pessimistic. There are buyers. The fact that investors are backing a two-year old real estate startup means that there is a market and there is an opportunity.
So markets of tier II and beyond will drive real estate?
There is a market in top cities as well. But growth and big opportunity lies in smaller towns and cities. If you plan to sell a Rs 5-crore apartment in a month, it won’t happen. But if you are targeting a Rs 15 lakh to Rs 20 lakh apartment, you can do so easily. Internet connectivity from players such as Jio has helped this growth, bringing everybody online.
People are shopping online, ordering food online. Now, there is a gross mismatch in smaller towns and cities when it comes to buying property, and hunting for the right deal. That’s where our big opportunity lies. We started with Meerut in Uttar Pradesh (UP) and cracked the market.
You managed to get big global names as your backers. What are their putting their money on: the India story or the Bharat story?
My pitch to them is tier II. A few of them came to India, and I took them to smaller towns and showed them how infrastructure has improved. When pessimism in real estate is maximum, I see an opportunity. This is how a hedge fund guy is trained to work. People in India still invest in gold and real estate, and that has not changed. If in top cities there are few takers for flats, plenty in smaller towns are looking to buy plots as well.
How do you intend to scale your presence?
Clicbrics is present across seven cities, and plans to scale up its reach across 40 cities in two years. Most of our revenue comes from smaller cities. We operate in seven cities now, and can easily scale aggressively. But the idea is to go steady.
We are soon entering Indore and Gwalior in Madhya Pradesh, and then Mathura in UP. We need to be measured in our approach and not go overboard.