Zolostays, which offers affordable housing apartments to young professionals and students, has raised $7 million (approximately Rs 50.09 crore at current exchange rates) from venture debt firm Trifecta Capital, the co-living space provider said in a statement, on Thursday.
Nikhil Sikri, co-founder and chief executive officer at Zolostays, said the firm will use the funds to increase its capital expenditure investments, product innovation, and geographical expansion.
“Building an organization to be the ‘Amazon of co-living’ takes commitment and our investment program presents a playbook that supports this vision,” he said.
The Bengaluru-based company, which operates under Zolostays Property Solutions Pvt. Ltd, aims to have one million beds under management by 2025. The firm also said it is in advanced talks to raise its Series C round of funding.
In January this year, Zolostays raised $30 million (around Rs 208 crore) in a Series B round of funding led by private equity firm IDFC Alternatives, South Korea's Mirae Asset and existing investor Nexus Venture Partners.
Separately, Nilesh Kothari, co-founder and managing partner at Trifecta Capital, said the firm was confident in its investment because of Zolostays’ strong revenue growth and unit economics. “We strongly believe that Zolo’s credible brand, wide network and deep expertise in the operative know-how of co-living will clearly allow them to build a large business,” he said.
The startup was founded in 2015 by Nikhil Sikri, an alumnus of the All India Institute of Medical Sciences and Indian School of Business, and Akhil Sikri, a graduate of the IIT-Delhi.
Users can make a booking either via its mobile app or website. Zolostays says it currently operates over 400 properties across ten cities in the country including Bengaluru, Chennai, Kota, Delhi, Mumbai, and Coimbatore.
It raised $5 million in Series A funding led by Nexus Venture Partners with participation from venture debt firm Innoven Capital in January 2017. According to VCCEdge, the data research platform of Mosaic Digital, investors in the startup include Patni Wealth Advisors, IDFC Alternatives, Innoven Capital and Nestavera, among others.
Deals in the co-living segment
The co-living asset class has gained traction in India in recent months. Several startups have ventured into the segment, attracting investments from both domestic and global institutions. Several real estate investors have also set up co-living and co-working firms or backed such startups.
For instance, in August, the Embassy Group said it forayed into co-living through EPDPL Co-Living Pvt. Ltd, which will target students from colleges and professionals with multinationals in Grade A business parks across Bengaluru, Pune, Hyderabad, Delhi-NCR (National Capital Region), Mumbai, and Chennai.
Last month, GoStops, a hostel chain focused on young travellers, raised an undisclosed sum from angel investors including Nitish Mittersain, founder and managing director of mobile games company Nazara Technologies Ltd.
In June, a private equity fund of JM Financial Ltd said it was investing Rs 40 crore in Coimbatore-based co-living space provider Isthara Parks Pvt. Ltd. Isthara Parks said it would use the money to fund its expansion plans in its existing markets.