Hyderabad Startup Helps Indian Middle-class Co-Own Property; Clocks Rs 40 Cr

Imagine waking up in Lucknow, in your two-bedroom apartment. You get a phone notification from a holiday resort in Goa. The resort did really well this season - and your rental income has just come in.

You’re the co-owner of that property but without the downsides of having to maintain it every day. All the grunt work is looked after. So you look at your phone again and book tickets to Goa. You’re considering spending 7 days at your property there - because why not?

This is the experience that Fracspace is delivering to hundreds of customers in India. The ease of owning a property at affordable rates, along with enjoying the rental income and proceeds that come with it.

The man behind this? Unnath Reddy, a corporate employee-turned-serial entrepreneur.

HOW IT ALL BEGAN

In an exclusive interview with Startup Pedia, Unnath says, “I was a corporate employee in a real estate firm and was earning a decent Rs 1 lakh a month. But I never restricted myself to just my office cubicle. I began experimenting.”

An incident at a luxurious 5-star hotel triggered him to pivot to something more impactful than the traditional real estate field he had been working in.

It was a random Sunday and Unnath decided to get some coffee at a high-end hotel restaurant. But he was in his track pants, and the hotel staff escorted him out!

The next day, Unnath went in smart casuals - and was met with utmost hospitality. 

He says, “Chairs were pulled for me, the table was cleaned twice, there were extra cookies and cake with my coffee. All of this left me wondering about the kind of culture we have in society. Does a middle-class person not deserve this kind of treatment?”

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So at the age of 21, Unnath decided to set up a luxurious but affordable coffee restaurant. It was his way of giving the taste of luxury to the Indian middle class.

But it didn’t exactly scale.

While still continuing his job, Unnath took some funds from friends and family and tried his hands at everything - from service apartments, restaurants, mini resorts, and staycation properties.

But things didn’t work out for him.

He says, “One of the reasons 12 businesses failed for me, one after another, was that I wasn’t taking calculated risks. I was young, was juggling my job along with these new real estate ventures, and wanted to try my hand at everything. But when you do that, you’re unable to have a laser focus on one thing. That’s exactly when everything comes crumbling down.”

However, despite the failures, Unnath Reddy was not one to give up. 

In 2022, with just Rs 60,000, he launched Fracspace - a startup that lets you co-own a property and enjoy rental yields.

He started Fracspace with the same ethos that his 21-year-old version had started that coffee shop with - to make luxury accessible to the Indian middle class.

According to Unnath, “Real estate, being expensive to invest in, has always remained in the hands of the affluent sections of society. But I wanted to change that. Why should terms like passive income be reserved for only a few? Rental income is a great tool for keeping yourself financially secure. I wanted people to have a taste of the luxury of rental yields, and the pride and security that comes with owning a property.”

Fractional ownership of property wasn’t a trending concept when Fracspace started. So it took extra efforts for Unnath to convince people, get investors on board, and then make potential customers aware about the use-case of co-ownership.

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WHAT FRACSPACE DOES

Today Fracspace is a fast-growing co-ownership property platform.

When someone is ready to invest in a property, a sales executive flies down to their location, consults them, hands over the documents, gets them signed, and then remains in constant touch for any kind of follow-ups.

Unnath Reddy tells Startup Pedia, “It is an additional cost to me but I really respect the money that people put in the properties and the faith they place in Fracspace. Sending my representative to their location and addressing their queries is the least I can do.”

Fracspace offers properties for co-ownership in 15+ locations like Goa, Munnar, Hyderabad, Kerala, Bali, Dubai, and the USA. These include holiday homes, resorts, and even rental apartments.

The minimum investment needed to become a co-owner is Rupees 10 lakhs and a stable annual return of 8% is offered.

“During peak seasons, the returns can even go up to 12%. We have a WhatsApp group for each property and their co-owners. Everything that goes down there is communicated and everyone is kept in the loop. There is complete transparency when it comes to invoices, guest bookings, and bills,” Unnath adds.

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GROWTH

With time, Unnath Reddy and his team are now turning Fracspace into a B2C property ecosystem.

While co-ownership remains the primary offering of the business, the Fracpsace application now has an umbrella of services including buying, selling, and renting of properties, as well as interior consultation, property management, housekeeping, and more.

While Unnath Reddy’s Fracpsace achieved a turnover of Rs 40 crore in FY24, the startup is projecting a revenue of Rs 100 crore in FY25.

The founder has recently shifted his 46-member team to a resort-type office.

LOOKING AHEAD

Apart from expanding the co-ownership properties, Fracspace is working towards becoming a travel and accommodation aggregator.

By the end of 2025, the startup also wants to cater to B2B audiences by enabling hotel check-in and check-out mechanisms and providing SaaS services.

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