Online classifieds company Quikr recently raised an eye popping $90 Mn in funding from Kinnevik and existing investors. Many of us wondered what does a classifieds company need $90 mn for? In an interview with NextBigWhat, the company’s co-founder & CEO Pranay Chulet says that the company wants to hire more people, focus on product development and marketing. Edited excerpts.
How will you be using the recent $90 Mn in funding that you had received?
There are three core areas where we will be using the amount. We would specifically invest this over time in product innovations and product formats – because a lot of growth is coming from the mobile side. Mobile is a very different animal than the desktop site. Not only do we need to innovate on our business because things move fast, you also need to worry about multiple operating systems, hundreds of different types of phones, screen sizes and so on.
We are continuing to expand our team. Right from the beginning we have only had the best quality team in the company. If you look at our management team and the people working in management, I’m pretty comfortable stating is the best team in the classifieds industry. Getting talent like that needs good investment.
Third is, marketing. It is a fast growing market. Therefore you need to make sure you are marketing well.
In terms of product innovations, what changes can be expected?
We do a lot of things in a tightly integrated market between our product and marketing. Recently for example, we introduced the Maximum Sales Price. After a lot of research we discovered that there is a lot of uncertainty in both the buyers and sellers mind on what is the right price for a used product. We wanted to educate the customers and set some standards on what would be a good price for any given product/model/company. So we came up with the marketing side of it.
There is also a lot of product innovation that goes into it at the same time. One part is investing into analytics. This will basically help us develop deep algorithms that are very specific to each category like cars or bikes or televisions. The first step is to build these algorithms, second is to actually put it on the website. More importantly, in terms of mobile, building the same into the app takes a lot of time and money.
Mobile Vs Desktop. Where do you see more growth?
Mobile is growing faster as compared to desktop. Mobile has grown 5-6 times if not more, over desktop in the past one year. I do foresee this to continue for the next 3-4 years.
We are going to bring a new interface that will focus on making it easier for people to search and reply to each other. You’ll see a lot of innovations in our mobile app that will make it easier for people to post or reply to ads. That’s the next big thing we are working on and we will soon come out with it.
Is Quikr looking to enter into the transactions space?
Not at the moment.
With the new round of funding, are acquisitions on the anvil?
Right now for us the focus is to keep our heads down and build the business the right way. That does seem the best way to continue to build our product. If we find a company that we want to acquire, then we will take a look at it. But it’s not something we’ll lose sleep over, or distract ourselves by going and hunting for them. There’s no M&A focus in the company basically.
How big is your team right now, and where are the new hires going to range across?
We are about 140 strong. In terms of hiring people, our investments would cut across product management, marketing, analytics, operations and sales. We would continue to grow various parts of the business. We are going to focus on quality as much as quantity. I guess our workforce will double over the next 2-3 years or so. Yes, you can definitely expect high profile hires in the future.
What are your revenues like? How does your revenue model operate?
Our revenue is about 5 times more than what it was before. We don’t count GMV as part of our revenue. So, our revenue will be 80-90% margin. It has been in double digits six months ago and it is growing at a fast pace.
It is a very simple, straightforward revenue model. There are three revenue streams – premium listings mostly by small businesses, second is lead generation for small businesses, and third is advertising. These revenue streams size is also in that order. Advertising forms a very small portion of that revenue, probably around 5%. We focus on high impact advertisers only on the platform. Overall premium listing and lead generation would by far be the larger portion of our revenue stream.
What has been the traction in the past year?
There are three different ways to look at the traction in this business. People always talk about traffic* first. While that is an important metric, the world is bigger than those metrics. There is traffic, engagement and then, monetisation.
If you look at the past 3 years, we have doubled our traffic, tripled our engagement and in terms of monetisation we have grown over 5 times, which is where we want to be.
Which are your highest selling categories so far?
Three categories which are neck-to-neck are cars, real estate and we also have services as a good category.
* (According to one report, the company has 32 mn unique visitors/ month)