ZoloStays Property Solutions secures $30m in Series B funding round

India: Bengaluru-based ZoloStays Property Solutions, the parent company of ZoloStays, has secured $30m in a Series B funding round.

The funding round was led by existing investor Nexus Venture Partners, in conjunction with IDFC Alternatives and Mirae Asset. The round is estimated to have pushed up the start-up’s valuation to $100m in total.

ZoloStays is a property and real estate marketplace, which includes categories for paying guest accommodation, serviced apartments, and co-living spaces. Zolo will primarily put the investment towards its intended rapid expansion to other cities, as well as strengthening its existing footprint in the six cities in which it is present and investing in the student accommodation segment.

The company said it also intends to use the capital to extend the technology division and venture into new technologies like IoT to enhance its service offerings to customers.

ZoloStays, which currently operates in Bengaluru, Hyderabad, Pune, Chennai and Kota, was founded by Nikhil Sikri, Akhil Sikri, and Sneha Choudhry in 2015. The company initially helped students and bachelors find accommodation along with options for meals.

The startup is said to have 16,000 “live beds” and 50,000 “locked-in beds” under its two offerings — Zolo Standard and Zolo Select. Claiming to be the largest co-living player in India, ZoloStays also raised $5m in a Series A round in 2017.

The company has reportedly grown twelve-fold since the previous round and now plans to ramp this up to 10x growth within the next two years. It also plans to boost its current 350-strong workforce by hiring another 200-300 by the end of 2019.

At the end of the 2018 financial year, ZoloStay’s revenue from operations stood at $3.88m while it incurred a loss of $576,240, according to a report.

The startup plans to bring in $14.4m in revenue in the next financial year. It has also partnered with large builders to launch fully-managed accommodations, which is becoming an increasingly popular trend in international cities such as Hong Kong and New York City.

Hospitality unicorn OYO entered the housing rental segment last year to accommodate the rising number of students and working professionals who seek out rental solutions to bring down the cost of living in a new city.

Another major player in the home rental space is NestAway Technologies, which is in talks to raise $100m, according to reports. The company has already raised $94.2m from investors such as Tiger Global, IDG Ventures and Yuri Milner.

Other companies in the co-living and home rental space include ZiffyHomes, Stanza, StayAbode and CoHo.

The residential rental market in India is valued at between $18bn and $20bn, according to industry estimates, of which the share of the paying guest market is between 35-45 per cent.