Nexus Venture Partners-backed co-living startup Zolostays Property Solutions Pvt. Ltd is in advanced talks with new investors to raise up to $100 million for its Series C round through a mix of equity and debt options, according to a top company executive.
“We are looking to close a $100 million round, which will be used to fund the expansion of our workforce team as we have launched in new cities this year, and to help increase inventory size and upscale furnishing options across our current inventory as well,” said Dr Nikhil Sikri, chief executive of Zolostays in an interview.
Zolostays had last raised $30 million in its Series B round in January from investors including IDFC Alternatives, Mirae Asset, and Nexus Venture Partners. Other investors in the company include Alec Oxenford, founder of OLX, and Chennai-based Olympia Developers and Patni Computers Family Office.
The four-year-old startup is looking to make housing affordable for students, working professionals, and freshers who move away from their hometown in search of jobs. Since 2015, the company has added around 30,000 beds, and another 60,000 contracted beds that will be added to the platform in the coming months, according to Sikri.
Currently, Zolostays offers both shared and private rooms for rent on its platform. It works with both property developers and owners on a revenue-sharing model and leased model. Sikri said the demand for “private room portfolio has been increasing, primarily because people have become more comfortable with the co-living concept”.
Apart from just a fully managed room, Zolostays also provides amenities like WiFi, housekeeping, repairs & maintenance, food service, and DTH connections at its properties and included in the monthly rent.
“We have two formats of housing options on our platform; one is the Zolo Select option which offers high-end luxury apartments on shared rentals as well as Zolo standard which is basically 4-5-floor tower, along with a community lounge… Around 30% of our new closures come in through referrals from current property owners, rest 70% is outbound closures,” said Sikri.
Besides shared living spaces, the co-living market has been increasingly focusing on offering fully managed apartments and independent buildings on rent by directly tying up with individual owners. With dwindling rental yields and large amounts of inventory lying unsold in the real estate segment, co-living startups have been looking to onboard these unsold properties.
Mint reported in February that Oyo’s co-living brand Oyo Living has been in talks with asset owners and developers in worst-affected cities like Noida to convert unsold properties into shared or even family-rental facilities. Tiger Global-backed Nestaway had started offering a family rental option in 2017 and has been constantly scaling it up across cities.
Sikri told Mint that Zolostays is also looking to launch fully-managed houses targeted at families and individual groups in the next three to four quarters. Currently, Zolo is present in 10 cities, including Bengaluru, Chennai, Kota, Gurugram, Hyderabad, Pune, Mumbai, Noida, Delhi NCR, and Coimbatore. It plans to launch in more cities like Indore, Nagpur, Nasik, and Chandigarh in 2020, according to Sikri.
This article was first published on livemint.com