StayAbode facilitates affordable co-living in Bengaluru.
When 25-year-old Shalini Sinha moved from Muzaffarpur to Bengaluru, her first order of business was to find accommodation in an unknown city. Her case is achingly familiar to anyone who has moved to a new city and is looking for a place to stay. From rental agreements to picky homeowners, finding a comfortable place to stay seemed near impossible. Shalini couldn’t help but think of the co-living spaces of Europe that a colleague had mentioned in passing.
Co-living spaces are homes shared by several like-minded tenants, who enjoy the comfort of living in quality homes with all the amenities they need, including furniture, furnishings and appliances, but without the hassle of dealing with landlords, or having to shell out a fortune for these. That’s what Shalini wanted.
Thinking along the same lines were friends-cum-colleagues Viral Chhajer, Varun Bhalla and Devashish Dalmiya, who spotted this exact gap and decided to tackle this problem head on. With the sharing economy growing steadily into every part of life, startups like Rentomojo, Homigo, YourOwnRoom and Nestway were already changing the face of renting a place to stay.
Born in the West, brought to India
When they set up StayAbode in August last year the founders’ idea was to offer tenants more than just shared rental accommodation. The company differentiates itself by adding a layer of service to what’s already available. Viral explains,
“In our properties, we don’t just rent out rooms and beds, but give tenants a hotel-like experience. You have housekeeping and bill payment services on call, which saves you the hassle of dealing with a housekeeper just to get your bedsheets changed. It works on a complete plug-and-play model.”
Devashish first came up with the idea of StayAbode when he was in Europe. While travelling across the continent, he understood how community living worked and realised that it was a big, untapped market back home. He considered a short-term, hostel-type setup for travellers.
However, as he discussed this idea with Viral, they realised that the market for short-term accommodation didn’t have a problem in the first place. “There is everything available from Rs 300 to Rs 30,000 a night. But when you look at the rental space, there is a major gap in terms of the quality of accommodation needed for different price ranges,” says Viral.
A growing need for co-living spaces
The idea of co-living and shared rental spaces has been catching on in the past two years, especially in cities like Bengaluru, Delhi, Mumbai, Hyderabad and Chennai, which have a large white-collar migrant population of millennials. They are happy to move from one city to another but loathe having to own household goods and tackling the intricacies of widely different local rental customs.
According to a PwC report the residential rental market in India is pegged at $20 billion, of which urban spaces account for $13.5 billion. The founders of CoHo, in fact, peg the co-living market at $10 billion. Tiger Global-backed NestAway, for instance, has raised a total of $43 million in funding and is already present in eight cities.
While co-living is still a nascent market in India, there are several players trying to carve a niche for themselves: Gurugram-based CoHo leases apartments and villas and converts them into co-living spaces. WudStay follows a similar model. Most such spaces provide furnishings, kitchen utilities, rental and maintenance services.
StayAbode, however, follows a full-stack model, not a part-inventory one. It leases out complete buildings – from the basement to the terrace – and turns them into co-living spaces. After that, their team puts together the furniture and common-room setups, ensuring the space has everything that a tenant needs, including add-ons like music rooms, art rooms, study areas, even barbeque grills in some properties.
A win-win for tenants and owners alike
StayAbode says that once tenants choose a room (or even half a room), they can expect to get their utility bills paid, linen washed and home services like plumbing and repairs taken care of. The tenants’ experience, say the founders, is that of living in a boutique hotel with a community of like-minded individuals.
From a property owner’s perspective, Viral adds that if a property is valued at Rs 10-11 crore. StayAdobe aims to garner anywhere between Rs 1-1.5 crore in rentals every year.
At present, StayAbode claims to have over 300 beds across five properties in south Bengaluru with monthly rents ranging from Rs 12,500-35,000, depending on the type of property. Tenants need to pay a three-month deposit upfront, lower than the standard 10-month-deposit that is the norm for the city.
Reducing the capital used
StayAbode seems like a capital-intensive business, but Viral explains that they have tied up with vendors for furnishing, house-keeping and house services. The vendors are paid a percentage of the rent as payment for services rendered.
The team has also built a new workforce management system with dynamic task allocation. This will help provide housekeeping on demand and cover use cases such as managing housekeeping tasks in case of an unoccupied room, etc. It gives a real-time, bird's-eye view of housekeeping activities across their properties and help them make quality assessments and improve services.
Varun Bhalla, Co-founder, StayAbode says,
“We want to develop and use technology to better the industry’s service standards and improve resident experience. We have filed for a provisional patent for our Workforce Management System which will help us increase workforce efficiency by 30-40 percent, continuously improve our quality of service and onboard and train staff quicker as we scale.”
StayAbode plans to expand to over 1,200 beds by this year at an average rent of under Rs 15,000.