A hide-and seek-game that's disrupting property rental brokerage business

Nobroker has developed an algorithm to weed out brokers and facilitate direct interaction between the home owner and the seeker of rental accommodation

The company doesn't display its nameplate publicly. It discourages its employees from flashing their company ID cards. As if this were not enough, the firm has, quite painstakingly, also changed its office location on Google map.

If you're imagining the company is engaging in any illegal activity and trying to dodge the law, you couldn't be further from the truth. It is, instead, a huge disruptor and its battle is against deeply-entrenched incumbents.

The company in discussion is NoBroker, a Bengaluru-based start-up that is slowly transforming the way houses are being taken on rent. Any house search in metro cities invariably ends up with payment of hefty brokerage to the middleman or broker. The amount of such brokerage varies from one month's rent to a certain percentage of security deposit, which is paid to a middleman merely for showing a home or passing the contact details of the landlord. Despite the existence of many prop-tech sites in India, a true marketplace for rent seekers and landlords never really existed, as it was the middleman who gobbled up all the space meant for posting availability of accommodation.

However, NoBroker claims that it takes special effort to identify the genuineness of each posting on its website to eliminate middlemen and commission agents. It has also developed a machine-learning (ML)- and artificial intelligence (AI)-based algorithm that identifies brokers and restricts them from posting advertisement on its platform. It typically gauges the difference between a genuine landlord who has posted his property for rent and a commission agent, by studying patterns of publicly available information through social media and other such platforms. 

Such initiatives in transparency by the start-up, founded by three IIT and IIM alumni -- Amit Kumar Agarwal, Akhil Gupta and Saurabh Garg in 2014 -- have had their repurcussions. Upset with the platform, local brokers in Bengaluru in 2015 vandalised its office in the city, threatening ots office staff with dire consequences for excluding them.

"We were completely unprepared for that attack. Subsequently, we shifted our office to a new location. Even when we transferred our furniture and other things, a few brokers followed our trucks to discover our new office," said Amit Kumar Agarwal, CEO and cofounder of NoBroker. "But, the attack united us as we realised that our start-up is standing up for a cause," he added. Even today, its office phones receive threat calls from brokers, prompting the company to hide its existence from public eyes.

According to NoBroker estimates, around $4 billion in brokerage fees is paid in the top 25 cities in India annually and given that the company is trying to disrupt such huge money flow, some amount of backlash from incumbent players is natural. This idea of bringing transparency was also the biggest motivator for the founders to leave their lucrative careers and create something new.

"We had a deep conviction about the idea, as most of us had felt the pinch of paying heavy brokerages for taking flats in rent," Agarwal said. This is what motivated him to take a plunge to entrepreneurship and come out with a solution to the problem. "I will say that it was an inopportune time. My wife and I were expecting our first baby and I had a sound career. So, to leave everything and start something new was definitely a big decision," he said. "But, we realised that there would never be a perfect time."

While Agarwal is a graduate from IIT Kanpur and an alumnus of IIM Ahmedabad, Akhil Gupta is a graduate from IIT Mumbai. Another co-founder, Saurabh Garg has an engineering degree from IIT Mumbai, along with Masters from IIM Ahmedabad. "We knew each other from college days and had commonality of views before starting out," Agarwal said.

After disrupting rental space in five cities, including Bengaluru, Chennai, Gurgaon, Mumbai and Pune, NoBroker, which is backed by PE and VC investors such as SAIF Partners, Japanese investor Beenext and Korean investor KTB Ventures, is slowly expanding its reach. The firm has also added small commercial office space to its portfolio as part of its diversification initiatives.