This startup brings disruption to India’s student housing space with international standardsAthira Nair
Stanza Living brings co-living space for students, enabling a close-knit community for students, along with high-quality product and service offering.
At a glance
Startup: Stanza Living
Location: New Delhi
Launch: April 2017
Sector: Real estate tech
Problem it solves: Student housing
Funding: $2 million
Anindya Dutta, 34, and Sandeep Dalmia, 31, met nine years ago, while pursuing their MBA at IIM-Ahmedabad. From there, Sandeep, who hails from New Delhi, went into management consulting for leading companies, and startups internationally.
Anindya worked with private equity firm Oaktree Capital in London, and while there, he closely observed the student housing industry in the western world, comparing it with the scenario back home. In India, the underlying issues that students face range from cramped and makeshift spaces, unreliable infrastructure, poor maintenance, and inferior food quality.
He felt the Indian student housing ecosystem needed a strong concept - an environment for students that would stimulate learning and growth, along with international living standards. Disruption in the student housing industry, which generated annual revenues in excess of $14 billion, was an opportunity that Anindya and Sandeep wanted to exploit, and this resulted in Stanza Living.
In Italian, Stanza is a room, apartment or chamber. In English, Stanza is a grouped set of lines within a poem. As stanzas build the foundation for a poem, Stanza Living aspires to provide world-class accommodation to build the foundation for the most important chapter in a student’s life – college.
Stanza Living launched operations in April 2017, seed-funded by the co-founders. This co-living space for students enables a close-knit community for students, along with high-quality product and service offering. Their charges start at Rs 5000, and students have the options to choose from different service packages which suit their needs.
Stanza Living is based in New Delhi, one of the country’s largest education bases, where, each year, lakhs of students come from across the country to pursue higher education. It is also a hub for coaching and preparatory institutions. This makes the city a lucrative market for Stanza Living, which already has two buildings occupied to capacity, with over 100 students in residence.
Not an easy start
The opportunity for Stanza Living was to pioneer a new category, to disrupt the student accommodation market by introducing a tech-enabled, professionally-managed community living experience. On the other side of the supply chain, house owners and developers are offered a long-term value-based solution.
Yet, one of the biggest challenges the company faced initially was educating landowners about organising and standardising the student housing industry, which, for years, has been dominated by unorganised and fragmented mom-and-pop operators.
But once they received an overwhelming response from students and parents for their unique offering, Anindya claims, there has been a surge in interest from landowners, developers and property investors as well, who are excited about the student housing product.
The real backbone of Stanza Living, however, is technology – to analyse the market potential in different educational hubs, and deliver high-quality, scalable service offerings to student residents. It also plays a key role in designing, planning and optimising rooms and building interiors.
Putting students first
Stanza Living’s underlying philosophy is to always put students first. It partners with property owners and developers for fixed lease, revenue-sharing, and management contracts for a time period of between five and 12 years.
Stanza Living then becomes the operator of a student housing product on that asset. It remodels and redesigns the properties according to students’ needs, along with services like food, WiFi, laundry, security, etc on a single tech-enabled platform. A Stanza Living residence can accommodate 40-500 people.
“All our business strategies are based on developing a strong, deep and solid understanding of the student consumer and her/his needs, wants and aspirations,” Anindya stresses, adding that a student of any social strata looking for a responsibly managed, engaging co-living residence can be their customer.
The team reaches out to students online through social media as well as through college-level engagements to interact with them and understand their needs.
Stanza Living raised $2 million from Accel Partners and Matrix Partners in November 2017. Based on the 100 beds launched last year, Stanza Living is currently clocking a run-rate revenue between Rs 2 crore and Rs 3 crore this year. The company aims to have 5,000 beds by 2020, and the team of 30 will expand to 50 within six months.
Anindya adds, “The firm’s unit economics is healthy. All the deals that we do across our properties are profitable at a unit basis; else we don’t pursue those opportunities. Running a solid, profitable business with substantial and healthy unit level margins is a key priority for the business.”
Stanza Living competes with a large pool of unorganised players, and limited set of organised rental/PG service providers. Its USP is to offer a professionally managed, process-driven and tech-enabled community living experience to students, designed exclusively for their needs. Startups like Placio and Homigo also focus on student housing space, while home-sharing platform NestAway caters to students and professionals.
Both Anindya and Sandeep believe in businesses with the potential to generate strong recurring cash-flow streams. They are particular about taking full ownership and controlling every aspect of the consumer experience.
“As a result, we are focused on continuing to develop Stanza Living as a full-stack operator with complete ownership of the entire service and experience delivery,” says Anindya.
Stanza Living plans to launch operations in more cities in Northern India, and in Pune and Bengaluru. Within the next three months, several educational hubs in the country will witness the launch of Stanza Living’s signature residences.