A startup raises around $110 million from marquee backers, gets valued at close to $220 million, and then eventually gets sold at $11 million! Well, that's the story of NestAway. Did the pandemic kill the home rental startup or was it a victim of the funding winter? Or is there something else?
With absence of backers, and a diminishing runway, NestAway just had one option: to look for buyers.
March 2018, Bengaluru. Four young birds of the same feather were busy building their dream nest. Started in 2015 by Amarendra Sahu, Deepak Dhar, Jitendra Jagadev and Smruti Parida, NestAway had a flying start. From an operating revenue of Rs5.76 crore in fiscal year 2016, the home rental startup leapfrogged to Rs36.51 crore in FY17. Observers and industry analysts called it beginner’s luck. And they were not too off the mark. The next year, Tiger Global-backed startup had a sedate growth, with a top line of Rs46.98 crore in FY18.
With a sizeable presence across Bengaluru, Delhi NCR, Hyderabad, Mumbai and Pune—it catered to over 35,000 tenants and 16,000 owners—NestAway’s math was making sense.
No wonder, marquee investors flocked in droves. In March 2018, NestAway raised $51 million from Goldman Sachs and UC-RNT Fund, a joint venture between Ratan Tata’s RNT Associates and the University of California. The series D round of funding also saw participation from existing backers such as IDG India and Tiger Global. The shared rental platform now planned to spread its wings and enter new categories such as community and student housing. The nest was getting crowded, and the founders were fast mastering the bricks and mortar of the business, which had a massive upside.
Though NestAway’s growth was brisk, the writing was on the wall. Ballooning losses were hard to be missed: from Rs37.2 crore in FY16, they more than doubled to Rs97.73 crore the next fiscal, and then jumped to Rs156.81 crore in FY18. A year later, the bottom line was deep in red, to the tune of Rs219.68 crore.