Stanza Living Bags $ 57 Mn In Debt Funding From Kotak Mahindra

SUMMARY

This debt infusion comes on the back of $100 Mn equity funding raised by the Delhi-based startup mid last year

With an inventory of more than 75,000 beds, the startup is the managed accommodation provider of choice for students and working professionals in 23 cities across India

Stanza Living has raised about $220 Mn in debt and equity combined till date

Delhi-based coliving startup Stanza Living has raised $ 57 Mn (INR 425 Cr) in debt funding led by Kotak Mahindra Bank and RBL Bank with Alteria Capital.

The fund would be utilised to fund capital expenditure for Stanza Living’s current and future projects and accelerate its next phase of multi-city expansion, a statement said.

Founded in 2017 by Sandeep Dalmia and Anindya Dutta, Stanza Living provides rental accommodation to students and working professionals in more than 20 cities across the country.

Anindya Dutta, MD, and cofounder, Stanza Living said, “This debt raise is a result of our prudent financial management and disciplined planning to stay ahead of short-term market challenges. It will provide us with ammunition to deliver a higher return on equity and continue scaling our operations across the country.”

After the initial slowdown caused by the Covid-19 pandemic, the startup said it has demonstrated strong resilience and has recorded one of the fastest recoveries in consumer demand over the last two quarters.

Stanza Living also launched a new business vertical in the form of campus facility management on the back of strong inbound interest from large academic institutions and corporate houses.

The managed accommodation sector in India has witnessed a multi-fold increase in demand for reliable, high-quality and safe accommodation options, especially during the pandemic.

According to the startup with the increasing adoption of hybrid work/study models, operators such as Stanza Living create solutions for diverse consumer segments, as the sector continues to attract investor interest.

Stanza Living offers amenities such as chef-curated F&B options, professional housekeeping and laundry, high-speed internet, 24×7 security systems, fun recreation facilities, engaging community programs, convenient mobility services, creating a hassle-free living experience for lakhs of migrating students and working professionals.

Stanza Living is backed by Alpha Wave Incubation, Equity International, Falcon Edge Capital, Sequoia India, Matrix and Accel Partners.

Coliving Sector Hit By The Pandemic

The average monthly rentals in coliving properties, including student housing, declined by 10-25% across major cities after the outbreak of the Covid pandemic, according to property consultant Colliers India.

In its whitepaper ‘Future of Co-living in India’, Colliers India mentioned that the number of beds fell to 1.3-1.4 Lakh in 2020 from 2 Lakh in the previous year, while the occupancy level dropped to 40-60%.

During the 2021 calendar year, the supply has again bounced back to more than 2.10 Lakh beds, and the occupancy level improved to 70%.

According to the paper, the concept of ‘shared economy’ got severely affected during the peak of the pandemic. Factors such as uncertain economic conditions resulting in job losses, work from home and the shift of migrant population to their respective hometowns in the wake of the Covid-19 outbreak brought the evolving co-living sector to an immediate halt.

However, the country’s massive vaccination drive, and reopening of schools and offices in a phased manner are likely to help hostels and PGs gain some earnings.

Others Startups In Coliving Space

Stanza Living directly competes against the likes of Your-Space, Oxford Cap, Zolo Stays, Oyo Life, Roome, NoBroker, and NestAway among others. A few of them have secured funding in the past 2-3 months.

Delhi-based hospitality startup Your-Space raised $10 Mn in its Series A round of funding in January this year led by Shantanu Rastogi of General Atlantic, Ajay Gupta’s family office Ajax Capital and Holy Basil Consultancy.

NoBroker secured $210 Mn in its Series E round taking its total fundraising tally to $361 Mn. It is the 37th Indian startup to have entered the unicorn club in 2021 after ecommerce roll-up startup Mensa Brands.

Meanwhile, some of them have incurred heavy losses like Oyo. In spite of raising more than $800 Mn from SoftBank and RA Holdings in 2020 and $7.5 Mn from Hindustan Media Ventures in 2021, hotel rooms aggregator OYO including Oyo Life has remained cautious last year and continued to trim loss-making business models.