Bengaluru-based home rental startup NestAway’s co-living subsidiary The Hello World has acquired Bengaluru-based co-living provider StayAbobe in an undisclosed value deal. The acquisition was done a few months ago and has been announced now.
Talking to Economic Times, founder and CEO Jitendra Jagadev said that StayAbode was acquired with a capacity of 2,000 beds and the company is now looking for more such acquisitions. “We are targeting to acquire at least 2-3 co-living operators each having an enterprise value of $10 Mn or more,” he said.
Founded in 2015 by Amarendra Sahu, Smruti Parida, Deepak Dhar and Jitendra Jagadev, NestAway is an online marketplace for home rentals, which turns unfurnished houses into fully-furnished and managed apartments and rents them to pre-verified tenants. It currently manages 150K units across 15 cities.
StayAbove was founded in 2016 by Viral Chhajer, Varun Bhalla and Devashish Dalmiya. The startup claims its model supports the lifestyle of the young, single “sociable” household, some of the facilities provided include payment of utility bills, linen wash along with daily housekeeping.
In September 2019, Nestaway invested $10 Mn towards its co-living and student living entity, Hello World. The Hello World currently has 20K beds and plans to add 30K more beds by end of the 2020-21 fiscal through both organic and inorganic routes.
Jagadev reportedly said that the annual revenue of the co-living firm stood at INR 40 Cr last fiscal which is likely to jump at INR 140 Cr-INR 150 Cr in the current financial year.
“We are targeting to reach 50,000 beds by March 2021. We are in discussions with landlords across various cities to take their properties on lease model,” he added.
The company did see Covid-19 impact, as revenue fell during the April-May period as students left to their native place from educational hubs like Kota in Rajasthan due to the pandemic.
He reportedly said that the company is currently focusing on the working professional side of the business and expect that students will also return once health situation stabilises. At present, Jagadev said the average occupancy level at its centres is around 65%.
The organised co-living sector in India has grown 100% over the last year with the entry of startups such as OYO, Nestaway, Grexter, Zolo, Coho and others. Yet, the sector is estimated to have an untapped demand of around 46.3 Mn beds in India. This untapped market demand is reflected in the growing investments in co-living startups.
According to FICCI’s latest report on the co-living, the shared rental accommodation market will expand at an annual rate of 10% till 2023.