Indian media is chasing funding & acquisition stories, ignoring real works – Info Edge CEO Hitesh Oberoi

Sainul Abudheen

From job portals to matrimony sites, Info Edge has been building and funding various consumer Internet companies in India

Noida-based Info Edge India Ltd. has been quietly building successful digital properties in India since its founding in 1995 by Sanjeev Bikhchandani. From job portals to matrimony sites, this publicly-listed business group made an entry into the consumer internet space when “internet” was still an alien word, and carved a niche in the country.

Its products Naukri.com (job portal), 99acres (realty), Shiksha (e-learning), and Jeevansathi (matrimony) are already a hit in India. The group also backed nearly a dozen companies in the consumer space, including Zomato, PolicyBazaar, mydaala, and Meritnation, some of which have gone for bigger rounds of funding and scripted success stories outside of India. 

However, it seems that the Indian media have of late been ignoring the real work being done by companies like Info Edge. According to its CEO Hitesh Oberoi, this is because the media are still chasing high-profile funding and acquisition stories. “All the media has been just writing about this company getting funded, this company is shutting down, this company is getting second round, this company is laying off, etc. The real work is not reported.”

e27 recently spoke to Oberoi to know about the innovations happening at its digital businesses, the market trends and the future plans.

Here are edited excerpts:

Job portal Naukri is one of your key digital properties. However, if you look at the market, recruitments have slowed down across sectors. How is this affecting Naukri?

I don’t think the recruitment has slowed down. Overall, we cater to 65,000 companies across different levels and across geographies. The recruitment might have slowed down in some sectors like startups. But there are other sectors where recruitment is doing okay, such as services, banking, insurance, hospitality, and travel & tourism.

In IT services, hiring has slowed down in some parts, but the IT sector itself is very vast. We have in our clientele product companies, development centres of MNCs, and companies making products for the domestic market. So, on the whole I feel things are still okay even in IT.

Although Naukri has been a pioneer in the industry, many HR-tech companies have cropped up recently in India, and they received funding. How tough is the competition with new entrants?

Lots of startups have been funded in this sector. Many of them have shut down, but many of them are still around, and even we have acquired lot of companies. We bought three companies in the last four to five years, and we have also been expanding into new areas.

People still see Naukri.com as a job site, but we have gone beyond that over time. I will take you through other activities that we are doing. But in general, online recruitment is our mainstream, but we are also into sourcing and recruiting management. In the sourcing space, the traditional players have been Naukri, TimesJob, Monster.com and Shine.com. And in the jobs space, we have 75-80 per cent share in the market. Now, the market also has new players like LinkedIn and some more networking sites. But still most of the recruitment is through portals who are using different tools.

Although it is one of the oldest players, there haven’t been much innovations with Naukri. Are you planning to integrate new cutting-edge technologies such as AI and Deep Learning, etc., into this?

We are doing so many things, not all of them are visible to the job-seekers because everything is not transparent. For instance, over the past five to six years, we acquired three companies. First one was Symantic Software Technology. We have worked on their technology, improved and integrated it into our platform. Because of them, we were the early mover in this space, which improved our search technology. With their technology, the visibility for the job seeker is that they can get better results, but it is not visible to the casual searcher.

Then we acquired MakeSense technology and integrated that into our platform.

Info Edge CEO Hitesh Oberoi

Info Edge CEO Hitesh Oberoi

We also acquired a company called TooStep. It has built a product in the recruitment and management space. We improved its product, developed it further, and launched it in the market around two years ago. We started with the basic version, launched the Pro version a few months ago, and got a very good response, so now we are planning to launch the enterprise version in next few months which will be targeting enterprises. We already have over 2,000 customers for different versions over the last two years. So, this product has been very successful and is contributing revenue to our total wealth.

We have developed some products in-house as well. Many companies wanted a referral hiring portal, so we started looking opportunities in this space sometime back. In many companies for instance, referral hiring is 20-25 per cent. So we developed a separate referral hiring portal and the app. Now, the companies who have this programme can give their employees the app and they can download it on their phone and in one click you can share your referral network. So, if you have social network account like Facebook, you can share it with your network and get more referral.

This product is doing reasonably well in the market. We have more than 600 companies using this product. The third example, which we have done in the last three to four years, is our enterprise product. Besides this, the move to mobile has worked wonderfully for us.

What percent of Naukri’s total revenue comes from the mobile app?

I would say for Naukri, it’s about 60-65 per cent. We started working on matching technologies, deploying lots of Machine Learning tools, crowdsourcing algorithms, lots of Big Data process techniques and the matching algorithm. Our teams are also working on getting to know how the quality of the job is for the job seekers, which is being offered to them.

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Earlier, the feedback we used to get from people on the quality of jobs was 45-50 per cent, meaning half the people were happy and half unhappy. Now that feedback has turned to 75 per cent. This has happened as the result of the deployment of the technology — Machine Learning, Big data, and Tech Mining. And now we are aggressively working on Deep Learning to take the satisfactory result to the next level. Because we have been using Machine Learning for the past three to five years, we are now thinking to set up a Deep Learning Lab.

So now we are planning to take it to the next level. So it’s like we have been doing all this, but it’s not visible. So you know there is a reason why our market share has gone from 45 per cent to 75 per cent over the last five to six years.

You have been sitting on lot of data (Big Data). However, you have not leveraged this technology when compared to new entrants …?

We have been investing in this. We have an analytics team and algorithm team for almost seven years now. So, we have been in investing in people since then. Earlier it was very hard to find people. Now it’s easy to find mobile developers as the technology has now become more mainstream. It was impossible to get a search engine optimiser 10 years ago, it was impossible to get a social media expert five years ago. So we started investing in Machine Learning, Big Data, analytics, algorithm, and crowdsourcing almost six to seven years ago. And that there were very few people available.

We now have more such people in the industry and looking to invest more in Deep Learning. There have been advances in Machine Learning over the last few years, So we would like to take the advantage of these advances in the area of Deep Learning. So we have moved from 60-65 per cent from all the above technology and now we want to move to 95 per cent in Deep Learning.

Chatbots are the new mantra. For any company, be it B2B or B2C, it is increasingly becoming a vital factor. Are you planning to integrate chatbots into your digital businesses?

In our view, it is not about chatbots, it is about technology. It is about making the chatbot intelligent or smart, and for that you require to get your basic algorithm right. And that also required the investment in Machine Learning and Deep Learning. Chatbots are the front-end, but the back-end for Chatbots are Machine Learning, Deep Learning, Big Data and the algorithms we have. So if we get these things refined, Chatbots are the layer which we can put on top of any place. Chatbot is smart not because of your interface, it is smart because it understands what you want and there is lot of Data Science to make it understand what it wants.

What is next for Naukri? Are you planning to bring in innovative features none has done yet?

Currently, there are four to five core things we are working on at Naukri. Just like I told you about HR-tech, so that is the whole idea of recruitment management automation. So how do you help companies do a better job in recruitment management process will continuously be an area where we will aggressively invest in: the referral hiring platform and career guide manager.

For instance, we have a product that can completely manage your career website. We have around 2,000 companies on this platform now. These are big things for us. Second is Machine Learning, Big Data, Algorithm Matching and personalisation. These are the core of our business and we are seeing the technology behind all of these.

The third big thing is the whole user experience on our platform — the mobile, the app, the front-end. The fourth thing is which we are investing behind is that we have to ensure to get all jobs and job seekers on the platform.

As companies post more and more jobs on the website, we have to ensure that they have to be on our platform, so we are getting job aggregation technology on our platform.

The other thing which we are going to invest behind is verticalisation. Verticalisation means the core product works with certain segment, works with high, mid-level people, CA level people looking for a job, which does not work well.

For instance, if we want to hire from campuses — we have launched a separate product for this. We have Campus Hiring Manager for this, which was one sector we were not catering to in Naukri earlier. Now we are working on tools and technology to cater to this. We are not a great platform for passive job seeker hiring. Today such people go to LinkedIn, so this is another area certainly where we want to invest time and similarly there are other verticals where companies are looking to hire from those verticals.

For instance, if you want to hire someone for blue collar space, you won’t come to Naukri. Sometime back, we invested in a company called Unnati Technology, which is a blue collar hiring platform. We don’t run their business, but we own the small chunk of their technology to support them. So we are investing in developing new products and platforms which are not very big on Naukri today.

Are you planning to launch something like LinkedIn?

We don’t want to be in networking space; We will continue to aggressively invest in improving our platform, technology, our engine but I don’t think we would want to be another networking site.

Any new acquisitions in the offing?

The big thing is that we are launching this enterprise version of the Recruitment Management system I spoke about. Phase one was to launch the Career Site Manager (CSM), which over 2,000 companies are using to manage job listings. Then we launched the pro version of this last year. Around 600-700 companies are using the CSM Pro version. This basically helps the mangers to organise all the resumes at one place, and this is the cloud based, SaaS-based offering and now we are working the enterprise version which is targeting the corporates, which will be rolled out next month.

If you look at any company or startups in online real-estate, it seems the sector is going through a rough patch — many shut-downs and M&As. How do you read these trends?

Housing is a large market, which has been on a constant decline for the last four to five years. The number of sellers have been down by almost 60-70 per cent of what it was at its peak, and that decline continues. Demonetisation made the final nail in the coffin for housing, but I think we have reached the bottom now. I don’t think things will get any worse.

Post demonetisation, the very next day, traffic on our site rose 40 per cent. It is now 20 per cent higher that what it used to be. So housing industry is making a comeback. Prices are corrected, rates are becoming more affordable, interest rates are falling, online is becoming better and better, so we have seen more interest in online activities in the housing space on 99acres.com.

As far as investments go, companies and startups go through lots of these things depends on how you understand the business, how you understand the domain. I agree that close to half a billion dollars were invested into real estate companies by VCs over the last three to four years and not one of these companies have become successful. But if you look at us, we have invested US$25 million in 99acres and we are now reaching towards break-even. If things work out for next few quarters, we would reach there and surely housing sector will also make a comeback.

New players such as Housing have come up with a lot of innovation, such as heat maps and 360-degree views of properties etc. Such innovations are absent in 99acres …

It’s very easy to launch features, but the question is, if the innovation is relevant to the market, property owners, and property sellers. So one of the reasons why many of the startups fail because they make these innovations that are not relevant for the market or domain. We operate in many areas which may not be obvious to you.

For example, we have worked on improving the data quality for the users that if I am seeing the right information, does this property exist, is it genuine, etc. So if you go to our platform you will see lot of verified listings, photos, videos which are more than any other platform. So we may not qualify as the very glamorous innovation, but this is what the market wants.

Similarly we have done lot of work on the brokers’ side and the builders side to help them do a better job of placing the property on our platform. So we have done lot of work in search options, mobile experience, removal of spam, giving the right information to the users.

Our mobile app traffic is 60 per cent higher than earlier few months. This is a very opaque market, there is no transparency in this market. So the first job for us is to (1) remove opaqueness, get transparency, and (2) get all the listings on the platform. We have over 10,000 projects on the platform. We have listings of over 1,000-2,000 societies on our platform. You can always say launch this and that feature, but how many people will use that feature, is what matters.

If these features are irrelevant and unworthy, why do VCs like SoftBank come and invest in these firms?

I am not saying all these features are unworthy, or big companies should not invest in these companies. I am saying that there is lot of noise, and people launch lot of things but often 90 per cent of these things are not relevant for the market. And lots of money is spent just for the sake of launching it and people get carried away.

And there are few things which we are not doing and we should be doing it, but what I am telling is what we are doing is making sense for the market, and this is our understanding of the market.

Have you looked at these new-age startups like Housing to bring them to your fold?

Yes, we look at companies all the time. We have very aggressive investment/acquisition program. I told you about three of our acquisitions — we have companies where we have invested or acquired in real estate as well. There are companies we look all the time in real estate, jobs etc. We have aggressive programmes where we look at investing in startups and in many cases, we even pass these.

We have done lot of good work in Jeevansathi in the last 12-15 months. And today, Jeevansathi is the fastest growing matrimonial site. There was a time when it was at number 3. Today, I won’t be surprised that Jeevansathi is not the no.1 player in the north. But it is in the northern region. You check out the app, website, user experience, it is the best matrimonial site. You check out the communication, the ad campaign, that’s one of the best and has done wonders for the brand.

Are you planning to be profitable with 99acres and Jeevansathi?

We can be profitable if we want, but we think that we should be investing in growth at this stage, so we would continue to do that. If after that top-line comes even higher than what we have invested and we are being profitable, we are making a little bit of money, well it does not mean that we are doing away with lots of money, but we will not shy away from investing.

You have invested in lot of digital properties, and most of them are into consumer Internet. Are you planning to foray into other verticals, as consumer internet is facing tough conditions in the past three to four years?

We want to focus in four sectors — recruitment, real-estate, matrimony and education. Shiksha (e-learning) has also been strong business, growing well. So these four verticals are large, the education vertical itself is INR 8,000-10,000 crore, the real-estate vertical is also INR 5,000-6000 crores or may be more, education is also huge and matrimony also has huge opportunity.

So, these are the four areas we want to invest in for next one-two years before we look in to any other areas. Outside the companies, we will continue to invest in other startups. So far our focus have been consumer Internet companies and mostly focusing on Indian market because it’s what we understand the most.

How have been your portfolio companies performing?

Like any portfolio, there are companies which are hitting the ball out of the park, some are doing well, and some are just OK. Zomato and Policy Bazaar are doing well, and couple of them have shut down as well.

What are your future goals? Are you investing in any other companies?

We look at the companies on a daily basis. We have invested in a lot of companies and we are also open to acquisitions. So far, we have made only small acquisitions. We have sufficient cash and the Naukri business is generating close to INR 300 crore a year, so cash is not a problem.

Some of your portfolio companies like Zomato have already expanded to foreign markets. So are you looking for investments or acquiring companies from foreign market, may be the US or Asian countries?

We have had a presence in the Middle East for a very long time. We have a site called Naukri Gulf, and we have Naukri in Dubai and Bahrain. These are the markets we have been operating for a long time, we will continue with this. But if you are asking that if we are aggressively looking to invest in any other market, so the answer is NO. We think that Indian opportunity is huge, and we should focus in Indian market.

Foodtech industry is going through a storm and Zomato has laid off so many people, so what’s happening in the food-tech industry and are you bullish about it, and how is Zomato performing?

In my sense, Zomato is doing really well. Their top-line has been growing at a handsome rate and their burn is down to single digits and they are sitting on lots of cash. They have very aggressive plans to enter new categories within India, so I am very bullish about Zomato. I don’t know about foodtech as a whole.

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