NestAway, a startup in the home rental space, has received funding of $50 million (Rs 330 crore) from UC-RNT Fund, an investment vehicle sponsored by Ratan Tata, the Chairman Emeritus of Tata Sons and the University of California, apart from the existing investors in the startup, Tiger Global and IDG Ventures India.
It is also being reported that the company is still in talks with more investors and it is possible the funding may go beyond this amount to touch around $80 million of these talks are concluded successfully. Among the possible investors who could pick this additional funding is Fosun. Reports also suggest that South Africa’s Naspers was another investor, NestAway was in dialogues with, but the investment deal could not be clinched.
It must be clarified that neither the investors mentioned above nor the destination company NestAway has officially confirmed any of these.
Now on the business model NestAway has adopted, it offers property management services, where owners of properties can leave it to them to handle the upkeep and maintenance of the property while the property is being rented out. Out of the monthly rentals collected, NestAway gets to retain 10-12% commission and remit the rest to the owner of the property. Neither the property owner nor the tenant has to pay any other fee, like the conventional brokerage, to NestAway. The company has 15,000 such properties already under its belt clocking a gross rental collection of ₹350 crores. The properties are spread over 8 cities.
In addition to this the startup has launched another scheme One NestAway, which is on the lines of what OYO offers through its Townhouse platform. Here, NestAway will completely take over the property and manage it for a fee. They have netted some 500 properties in Bangalore alone through this scheme. This is normally the practice in most developed economies.