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The joy of providing home services

Bengaluru-based HouseJoy is vying for a bigger pie of the $100-bn on-demand market

K Rajani Kanth 

HouseJoy founders, Arjun Kumar (left) and Sunil Goel
HouseJoy founders, Arjun Kumar (left) and Sunil Goel

Before launching HouseJoy, a Bengaluru-based on-demand home services start-up, and had traversed different routes in their lives. While Kumar worked on developing the MakeMyTrip platform for ValueLabs, before starting Bookadda.com in 2010, Goel was in the leadership team of Tesco and after that had headed operations at Tutorvista. Goel had even started VuFirst, a video-interviewing company for pre-screening of candidates ahead of a face-to-face interview.

A chance meeting at Tutorvista sowed the seeds for starting a platform business. Having involved with a travel platform (MakeMyTrip), e-commerce platform (Bookadda) and an education platform (Tutorvista), the duo evaluated various ideas. And, among these the services platform was the most interesting, given the scale and the current status of services in India.

FACT BOX
  • Inception: January 2015
  • Founders: and Sunil Goel
  • Area of business: On-demand home services
  • Market size: $100 billion
  • Fund-raising: Raised $30 million from Amazon, Vertex Ventures, Qualcomm, Ru-Net and Matrix Partners


The idea
"We spoke to over 100 service providers - from drivers, plumbers to electricians - to get an idea about the supply side of the services. Simultaneously, we spoke to the end users (customers) and understood the need for a platform solution," recalls Kumar. They also looked at similar business models in the US and China to realise the scope of the sector.

Finally, Kumar and Goel concluded there was an opportunity to disrupt this space in India. They started in January 2015 in Bengaluru, with plumbers and electricians initially.

Today, provides an aggregation of services ranging from maintenance and home repairs to plumbing, electrical services, home-cleaning and computer repairs. It also offers specialised services in beauty and in-house bridal make-up, laundry and dry cleaning, with pick-up and delivery at the doorstep.

operates in a highly-competitive and increasingly crowded home services market in India, pegged at approximately $100 billion. including UrbanClap, LocalOye, Taskbob, Zimmber and Oyk are already locked in a fierce battle to grab a piece of this pie.

Goel is unfazed. "The main difference is in our business model. We are a 'full stack' business. For the consumers, we are a single-click service," he claims. How does it work? The customer clicks on a service, HouseJoy ensures the best match of a service provider, ensures the provider reaches the customer on time, the pricing is transparent to the customer, and on completion, it ensures the job for any issues.

"The customer does not have to keep chasing the service provider to come on time, and for any after-works. She also need not haggle over the price. The whole platform is getting automated. The service provider is automatically allocated once the customer selects the service. This allows us to scale manifold," he explains. Goel says HouseJoy tracks the service provider to ensure that he turns up on time for the job. In case of any delays, the system automatically kicks in a backup service provider. "The customer can rate the service and the service provider on the app. The feedback ensures we always keep up the quality of our service providers," he adds.

Going forward
The one-year-old has so far raised $30 million (around Rs 200 crore), including Rs 150 crore in a Series-B round of funding led by Amazon, and included new investors Vertex Ventures, Qualcomm and Ru-Net Technology Partners in December 2015. Existing investor Matrix Partners India also participated in this new round.

"Housejoy has capitalised on its early-mover advantage to emerge as the leader in the local services space. Their focus on fulfilment of services sets them apart. Over the next 12 months, we are backing the team to establish market leadership and drive high revenue realisation along with high customer repeat," says Vikram Vaidyanathan, managing director of Matrix. "The funds will primarily be used to develop the platform and expand our presence across India," says Kumar.

HouseJoy, which runs on the marketplace business model where it charges a commission for services delivered through the platform, is operational in 15 cities, handling around 10,000 jobs per day. It plans to increase this to 100,000 jobs per day to service 25 cities by the end of 2016. Stating that HouseJoy currently has a consumer app on the Android platform, Kumar says the app for iOS is slated for release by this month-end.

"Since we are a platform that operates on commissions, the profitability of the company only increases as we scale. The aggregation of the services platform has just started. We are growing almost 100 per cent quarter-on-quarter, and expect to grow at this pace for the next three years," Goel says, adding that HouseJoy is expecting to break-even in most cities by the end of 2016.

HouseJoy is also open to acquisitions. Though the company has not earmarked any fixed budget or acquisition targets, Kumar says they would look at collaboration or acquisitive possibility, which will add value to their technology or supply base, along the journey.




EXPERT TAKE: Bhaskar Sayyaparaju

Housejoy is a service provider aggregation model, asset-light and highly scalable. The reason is that they rely on external service providers to execute the tasks. They manage service providers by measuring their performance on a regular basis.

In the US, these models have been in existence for some time. Examples are Angies List, Taskrabbit, Thumbtack and Porch. A few have emerged over the past year in India as well. Housejoy is one of the early in this space. They have been very successful in raising capital and that could be the biggest differentiation. Many of the models are very similar. Because of their access to capital, HouseJoy can differentiate itself by creating scale very quickly.

Most of the players in this space are facing challenges, with the biggest being that the sector is highly unorganised. It will take time to bring structure to the service provider network. Some of the problems include lack of transparency, lack of quality and lack of on-time performance. I hope they invest aggressively in training the workforce.

Focusing on customer service, workforce training and improving earning capability of the service associates can take HouseJoy to the next level.

Bhaskar Sayyaparaju is founder of hyperlocal home services platform IndiKrew

First Published: Mon, January 25 2016. 00:36 IST
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