Student housing startup Stanza Living on Tuesday raised $5.7 million ( ₹40 crores) in debt financing from Alteria Capital.
This is in addition to the $4.3 million ( ₹30 crores) raised earlier this year, taking the total debt infusion by Alteria Capital in Stanza Living to $10 million ( ₹70 crores).
Launched in 2017, Stanza Living claims to be the most capitalized player in the space, with total funding to the tune of $70 million from global investors like Falcon Edge Capital, Sequoia Capital, Accel, Matrix Partners and Alteria Capital.
The Delhi-based startup started operations in July 2017 with 100 beds in Delhi University’s North Campus area and has since aggressively grown its operations.
The company aims to re-imagine hostel living by offering high-quality residences and supporting services such as common areas, gaming zones and even gyms. Other value-added services that are offered include doctor and laundry services and internet packages.
Till date, it has unlocked an inventory of more than 47,500 beds across key hubs like Delhi NCR, Bangalore, Pune, Hyderabad, Chennai, Coimbatore, Indore, Vadodra, and Dehradun.
Commenting on the fundraise, Anindya Dutta, managing director and co-founder Stanza Living, said, “The capital infusion will enable us to further increase the pace of our strategic growth across markets through organic and inorganic measures."
The startup will continue to focus on transforming the shared accommodation sector in India, and the financial support will help them continue deepening access to consumers across the country, he added.
According to industry experts, the follow-up debt infusion showcases Stanza Living’s strong financial discipline, even as it continues to maintain its growth trajectory. Also, the capital infusion comes as an endorsement of the company’s business model that has been delivering healthy recurring revenues at scale.
“Through this partnership, we are together working on creating financing and funding structures that will set a new precedent for the industry in India," said Ajay Hattangdi, managing partner at Alteria Capital.
Hattangdi adds that startups are going for debt funding as founders and venture investors discover advantages of debt in providing a less-dilutive source than equity with which to fuel growth. While debt is cheaper than equity, there is always a risk of over-leveraging the capital structure in young startups since debt, unlike equity, carries a repayment obligation. “This is where high-growth companies like Stanza that have the right combination of a strong and supportive investor base, robust business execution, and an experienced founding team can derive the most benefit from safely introducing debt into the capital mix," he adds.
The student housing market opportunity in India is estimated at $15 billion, according to a report by property consultant Jones Lang LaSalle. India has about 34 million students in the higher education bracket and there is a large un-met demand for affordable housing option for students who migrate from smaller cities to bigger cities.