NoBroker metamorphosis into a Financial Services Powerhouse

A Quarter of Revenue Now Stems from Financial Services

Bengaluru-based prop-tech startup NoBroker is leveraging financial services to diversify its revenue streams, with significant growth in its home loans and insurance segments.

NoBroker, a leading property technology startup backed by Tiger Global, has identified substantial growth opportunities in its financial services vertical, particularly in home loans and insurance. With the rising number of young buyers entering the real estate market, the company expects its financial services to play a critical role in its future trajectory.

Saurabh Garg, co-founder and Chief Business Officer at NoBroker, shared that financial services now contribute about 25% of the company’s ₹600 crore revenue. “Our home loans vertical is already our fastest-growing segment. With increasing home sales and a growing attach rate for home loans, this vertical has the potential to become our second-largest business, following real estate transactions,” he stated.

The “attach rate” reflects the increasing demand for home loans as a complementary service to property sales. In FY24, NoBroker reported a threefold growth in its home loans business, though specific numbers were not disclosed.

Real Estate Market Revival Driving Growth

Garg predicts a robust home-buying cycle in the next 4-5 years, driven by cyclical growth in the real estate sector, genuine buyer demand, and potential reductions in interest rates. Additionally, rising rental costs, outpacing annual salary increments, are prompting tenants to consider homeownership.

Notably, NoBroker observed a 23% increase in homebuyers aged 25-35 on its platform during the first half of 2024, compared to the previous year. These buyers, predominantly from nuclear families and employed in private-sector jobs, view property ownership as a means of wealth creation and stability rather than a mere milestone.

Facilitating Financial Solutions

NoBroker’s financial services were launched to address challenges homebuyers faced, including delayed loan sanctions and limited knowledge of financing options. By partnering with major banks and non-banking financial companies (NBFCs) such as State Bank of India, HDFC, and Bajaj Finserv, the platform offers tailored financing solutions after preliminary income and credit checks.

“We noticed gaps in how customers accessed financial products, which is why we started offering home loans and insurance solutions. For every processed loan, we earn a commission from the banking partner,” Garg explained.

While financial services present an opportunity for diversification, experts caution against overestimating their scalability. Established banks and NBFCs already dominate the market, making it challenging for smaller players to make a significant impact.

Expanding Horizons

In addition to home loans, NoBroker is exploring new product ideas, such as short-term financing for down payments, security deposit-free rentals, and insurance for homeowners. “We continuously experiment with ideas and typically take five months to scale proven concepts,” Garg said.

Founded in 2014 by Amit Kumar Agarwal, Akhil Gupta, and Saurabh Garg, NoBroker became India’s first prop-tech unicorn in November 2021, following a $210 million Series E funding round led by General Atlantic, Tiger Global, and Moore Strategic Ventures. The company has raised $366 million to date.

With its financial services initiatives, NoBroker is not only diversifying revenue but also aiming to cement its position as a comprehensive real estate solution provider.