Amazon Makes Latest Bet on India By Leading $22M Investment in Housejoy
Amazon has led a $22 million investment in Housejoy, an Indian home services platform launched by some marquee founders less than a year ago. The U.S. e-commerce leader aims to turn India into its largest geographic market outside the U.S., reportedly investing as much as $5 billion in the emerging market. Amazon is no stranger to Indian deals, having previously invested in fintech company BankBazaar and gift card startup QwikCilver while developing it India’s largest e-commerce site.
In its most recent investment, Amazon is joined by existing backer Matrix Partners India, which previously financed Housejoy’s $4 million Series A round. New investors include Temasek Holdings’ VC arm Vertex Ventures, chip maker Qualcomm, and Russian fund Ru-Net Technology Partners.
The startup, founded by BookAdda founder Arjun Kumar and former TutorVista operations head Sunil Goel, was incubated at serial entrepreneur K Ganesh and Meena Ganesh’s GrowthStory. CEO Saran Chatterjee, former Flipkart VP of Product Management, joined in September.
Based in Bangalore, Housejoy has often been compared to Homejoy, a San Francisco-based cleaning platform that raised nearly $40 million before shutting down this past summer. Indeed, as with many of the U.S.’s on-demand marketplaces, such as Uber or Instacart, Housejoy is a marketplace through which independent workers can find jobs. Housejoy also serves as an online aggregator of a wide range of services that include pest control, plumbing, cooks, nannies, computer repairs, electrical, fitness and beauty. Beauty is one of Housejoy’s fastest-growing verticals, and with the new funding, the platform also plans to enter verticals such as home-based auto servicing and repair.
Housejoy intends to enhance its technology, build up its team, and improve on operations and quality control. The platform, which currently fulfills more than 4000 orders a day and partners with 10,000 service providers across 11 cities in India, aims to increase its range to 100,000 orders a day, fulfilled through a network of 50,000 contractors in 25 cities. Notably, the investment by Amazon means that Housejoy has the opportunity to earn partnership status as a service provider by fulfilling order deliveries. The startup also aims to make up to $2 million in strategic acquisitions to help it grow.
Housejoy is far from the only player in its home ecosystem. About 460 local services startups and 100 home services companies operate in India, according to startup data tracker Tracxn. Housejoy faces many competitors, the most prominent of which include SoftBank-backed Flipkart and Alibaba-backed Snapdeal. Another rival, UrbanClap, also a local services marketplace, raised $25 million from Bessemer Venture Partners this past November. Overall optimism is no guarantee for success, as Homejoy’s closing has shown. Whether or not these startups can continue to scale operations without compromising customer service remains to be seen.
Amazon’s investment marks its entry into India’s $50 billion local and home services market, a business it has expanded into in the U.S. through Amazon Home Services. Indeed, India, with its increasing wealth and fast-growing middle class, is a hot market for local and home services. It’s no wonder that Jeff Bezos is pursuing a diversification of offerings beyond product commerce– even as Amazon has invested heavily in building warehouses and in increasing its own selection to well over 25 million products.