How NestAway's valuation nosedived from $220 mn to $11 mn in fire sale

Home rental startup NestAway, backed by Tiger Global, has experienced a significant decline in valuation, plummeting from $220 million to a fire sale at $11 million. Aurum PropTech, following the approval of its board, has acquired NestAway for a consideration of up to INR 90 crore ($10.93 million) and plans to inject an additional INR 30 crore to stabilize the business. Jitendra Jagadev will assume the role of CEO, while Ismail Khan will become the COO of NestAway under the new ownership.

NestAway, founded in January 2015 by Amarendra Sahu, Smruti Parida, Deepak Dhar, and Jagadev, operates as an online marketplace for home rentals. The platform transforms unfurnished houses into fully-furnished and managed apartments, providing them to pre-verified tenants. Currently, NestAway boasts a portfolio of 18,000 properties and claims an annualized revenue of INR 30 crore.

The startup has previously secured a cumulative funding of $110 million from investors such as Tiger Global, UC-RNT Fund, Flipkart, Goldman Sachs, and Yuri Milne. However, its revenue from operations reportedly declined by 36.2% to INR 57.87 crore during the fiscal year ending in March 2022, compared to INR 90.7 crore in FY21. Additionally, losses increased by 44.3% to INR 94.97 crore during FY22, compared to INR 65.8 crore in FY21.

Aurum PropTech, which previously acquired NestAway's co-living and student living vertical, HelloWorld, has strategically acquired NestAway with the aim of revolutionizing the residential rental industry in India. The company plans to replicate the success achieved with HelloWorld under the leadership of Jagadev and Khan.

The Indian startup ecosystem witnessed 240 merger and acquisition deals in 2022, marking a 10% increase compared to the previous year, according to Inc42's Annual Funding Report 2022. With the global economic slowdown, layoffs, valuation cuts, postponed IPO plans, and funding challenges, the year 2023 is anticipated to witness more M&A activities, particularly slump sales.