Home rental company Nestaway Technologies has acquired Bengaluru based co-living space provider StayAbode Ventures in a cash and equity deal, two people privy to the transaction told TechCircle.
The acquisition is Bengaluru headquartered Nestaway’s second one this year after it bought apartment complex management platform ApnaComplex.
Emailed queries on the acquisition to Nestaway and StayAbode remained unanswered at the time of publishing this article.
StayAbode, also based in Bengaluru, is backed by Japanese venture capital investors including Akatsuki Entertainment Technology Fund, Incubate Fund and Voyage Group.
The company’s model is to make brownfield investments in existing properties and convert them into fully-furnished and managed rooms for single and shared occupancy. It also has a tie-up with CP Developers in Whitefield, Bengaluru, for its first green-field project. It managed close to 1,200 beds across 19 properties in Bengaluru in March 2019 and planned to add another 1000 beds in six months.
The acquisition will help Nestaway grow its presence in the managed student housing market. The company launched its student housing and co-working brand Hello World as a separate subsidiary in 2019. Hello World, which is headed by Nestaway co-founder by co-founder Jitendra Jagadev, works on a model similar to StayAbode, operating across 15 cities and an inventory of 10,000 beds.
“The acquisition plays into Nestaway’s focus on the student housing space as the churn is lower and users are locked in for a period of time,” said one of the people cited earlier on the condition of anonymity.
The subsidiary competes with other well-funded players in the space including Falcon Edge Capital backed Stanza Living and budget hotel and hospitality chain OYO’s co-living product, OYO Life.
The student housing/ coliving space in India is expected to witness an addition of 6 lakh beds over the next three to four years according to a study published by CBRE and Student Accommodation Provider Association of India in September 2019. The report also states that investments of around $700 million were made in the sector between 2017 to 2019.
Nestaway last raised $5 million in September 2019 from Goldman Sachs. The company has been in talks to raise its next round according to multiple media reports, but the round is yet to materialise. The company was valued at $200 million during its Series D round of funding from Tiger Global and Chiratae Ventures.