Funding round led by Falcon Edge values Stanza Living at $300 million

Bengaluru: Student housing start-up Stanza Living, run by DTwelve Spaces Pvt. Ltd, has received commitments worth $50 million in its ongoing growth equity round led by New York-based Falcon Edge Capital, according to two people close the development who asked not to be named.

The round also saw participation of the company's existing investors including Sequoia Capital, Matrix Partners, and Accel Partners. This is the first tranche of a larger ongoing equity financing round that the company is raising, said the second person aware of the deal.

Stanza Living is also in talks with multiple equity investors to raise additional capital for the current round, added the person quoted above. The three-year old startup was valued at $300 million in the current round, said the first person aware of the deal.

“The $50 million tranche is expected to close by the end of July 2019. The company will be using the fresh capital for organic and inorganic growth measures including potential acquisitions to strengthen its capabilities,” said the second person, requesting anonymity.

Mint had first reported the talks in March. Stanza Living has collectively raised $16.7 million till date across both equity and debt routes, excluding the current round.

“We have received interest from several marquee global investors. However, as a company policy, we do not comment on general market speculation,” said a company spokesperson.

Founded by Anindya Dutta and Sandeep Dalmia in 2017, Stanza Living offers managed accommodation for students in cities including, Delhi NCR, Bangalore, Pune, Hyderabad, Chennai, Coimbatore, Indore, Vadodara, and Dehradun.

It currently claims to have around 22,000 beds on its managed housing platform, which is a significant jump from around 100 students when it first raised capital from Matrix and Accel Partners in 2017.

The homes that Stanza Living offers are fully furnished with amenities like housekeeping, internet facilities and added services such as laundry, doctors and a concierge. Its monthly rental charges range from ₹7,000 to ₹20,000.

According to a JLL report in 2017, the student housing market opportunity is pegged at $15 billion. The report said India has approximately 34 million students in the higher education space, which is twice the size of advanced student housing markets in the West.

There is a large unmet demand for affordable housing option for students who migrate from smaller cities to metros and tier-2 cities in India. Cities such as Pune, Bengaluru, Hyderabad, and Chennai, as well as the National Capital Region are poised to become the top consumers of the co-living market, said another report from Knight Frank in this year.

However, it would be best to avoid presence in towns or cities that are heavily dependent only on education as a hub to attract millennials, added the Knight Frank report.

Stanza competes with other accommodation aggregators like Nestaway, OYO Living, Zolostays, and another student-focused rental platform OxfordCaps, which provides housing facilities in India and Singapore.