India’s millennial-driven shared economy has fueled a surge in growth in the coliving industry, which provides managed rental accommodation for professionals and students.
Between 2015 and 2021, numerous coliving startups such as Zolostays, Colive, Your-Space, Isthara, Housr, Settl and Hyphen emerged in the country, all of which offer the ideal home away from home.
However, COVID-19, the resulting lockdowns and repatriation from cities have turned the business on its head. The sector was hardest hit as offices and colleges went fully online for almost two years and demand dried up.
The coliving industry, which seemed to have ground to a halt in 2020, saw a slight recovery by the end of 2021. And now, the reopening of jobs across India has breathed new life into the ailing sector, which appears poised to bounce back to pre-COVID-19 levels or even higher.
According to IBEF, there are more than 75 coliving companies in India and the market is expected to grow to 5.7 million beds by 2025, up from 4.19 million in 2019. The size of the sector in India’s 30 largest cities is expected to grow by two percent to grow. fold and reach $13.92 billion from the current $6.67 billion.
The Future of Co-Living in India, a white paper by professional services and investment management firm Colliers, states that by 2024 the coliving segment is expected to have 450,000 beds, mainly operated by organized actors, as opposed to 210,000 beds by the end of 2024 2021
It estimates the current number of beds available across India at 6.9 million but says demand is much higher, especially considering the burgeoning student population, which is growing at a CAGR of 9.2%, with more than 9 .5 million students are pursuing higher education and need housing.
Only 18-20% of students are placed by the university, meaning the opportunities are great.
Across India, coliving startups are already reporting that the tide has turned.
Krishna Kumar, co-founder and CEO of Coimbatore-based Isthara Parks, which offers coliving facilities for professionals and students in Hyderabad, Bengaluru, Delhi-NCR and Chennai, says Isthara has entered the COVID-19 phase with 6,000 beds and have done so today over 24,000 beds which is a 400% growth rate.
He says, “Single rooms are in high demand as there has been an increased demand and preference for more personal space and privacy in the wake of COVID-19.”
The coliving and food court operator, which is targeting 10x revenue growth over the next three years, recently raised $10 million from Eagle Investments, a Dubai-based private investment firm.
Elias Kawar, Managing Director of Eagle Investments, says: “Since the pandemic, we have seen a significant increase in interest in the coliving sector. Rental solutions like Coliving combined with hallmarks of the hospitality benchmark can create a powerful market opportunity in a growing market like India.”
Delhi-based student accommodation startup Your-Space also claims to have doubled capacity post-COVID-19, with occupancy rates above 85% across all markets.
“User behavior has seen a major online shift in the wake of COVID-19. We launched online bookings and have seen strong growth in the last academic session,” says Venayak Saran Gupta, Chief Revenue Officer, Your-Space.
Bengaluru-based coliving spaces provider Colive says it has grown beyond post-pandemic coliving spaces into the largest rental market in India, connecting owners and renters on a long-term rental transaction platform.
The millennial mindset that favors “sharing” over “owning” has accelerated adoption, but the flexibility and savings that coliving offers have made it popular with diverse groups such as businesses, entrepreneurs, professionals and students.
Rishi Sreedharan, co-founder and CEO of coliving operator Hyphen (formerly Dwellingo), says demand has picked up again after the pandemic. “We’re seeing this play out in the fourth quarter across key Tier I markets. We’re currently growing 250% month over month,” he says.
The new business model
Coliving players across the country have been significantly impacted by the pandemic, with many changing their business model during this time.
Isthara’s Krishna says, “Our new business model focused on more efficient, cost-structured contracts, revenue sharing and improved technology integration. We believe we are stronger than we were before COVID-19.”
One of the first to break into the student accommodation market, Delhi-based Stanza Living diversified into rental accommodation for professionals.
MD and co-founder Anindya Dutta said the pandemic has prompted a recalibration of processes and frameworks.
Tech-focused managed accommodations platform Settl claims it is experiencing a faster and stronger recovery from COVID-19 due to the “bundled offering” it offers, ranging from community experiences, coworking/work-from-home setups to world-class living infrastructure have , household and more.
“As markets open up, we’ve been able to achieve average quarter-on-quarter revenue growth post-pandemic,” said Abhishek Tripathi, co-founder of Settl.
Growth figures after COVID-19
Most coliving startups agree that demand has skyrocketed in the wake of COVID-19, with many saying it is higher than before the pandemic.
Coliving provider Olive by Embassy was not very active during the pandemic, operating only three buildings at the time.
“Our growth has skyrocketed in the wake of COVID-19. We went from four to five buildings to register 25 buildings (with 2,400 beds) in Bengaluru. We have started to expand into Goa and are now eyeing Hyderabad and Mumbai,” says Kahraman Yigit, Co-Founder and CEO, adding that the majority of Olive’s properties are over 90% occupied.
Your-Space has also seen a resurgence as students return to college.
“Sales have increased fivefold from pre-COVID-19 levels due to strong demand and increased capacity. Your-Space is on track to achieve over Rs 150 crore ARR in the current academic session,” says Venayak.
The company has also expanded nationwide, growing from 3,000 beds to more than 12,000 and entering two new markets.
Colive claims to have added nearly 18,000 properties and nearly a million beds in the wake of the pandemic.
Hyphen, which added almost 70% of its 1,000-bed portfolio after the pandemic, mostly in Bengaluru, will soon open another 20% in Hyderabad. It’s also exploring multiple partnerships, expanding its partnership with edtech firm Scaler Academy.
After the second wave, Settl added 21 properties (up to 1,104 new beds in total) – 14 in Bengaluru, five in Gurgaon and three in Hyderabad.
Housr has also seen an increase in demand to pre-COVID-19 levels, with greater demand for single occupancy. The startup has 55 properties with 5,000 beds. Following the acquisition of StayAbode, the company recently added Bengaluru as a location and intends to expand to 100+ properties and 12,000+ beds across India by March 2023.
“The occupancy rate is currently the highest in the industry – 95% of Housr rooms are booked. We have expanded 6 times during the COVID-19 period by adding new accommodations,” says Founder and CEO Deepak Anand.
The way ahead
Your-Space has partnered with universities and colleges across India and regards them as key stakeholders. The company plans to invest Rs 50-80 crore to expand into existing markets and enter two new markets next year, doubling its bed count to 25,000 in the 2023-24 academic year.
Isthara has partnered with 30 colleges including IIT Hyderabad, National Institute of Fashion Technology, Malla Reddy Institutions, PSNA College of Engineering and Technology and JB Institute of Engineering and Technology. It is looking for more connections to fuel its expansion. The startup also aims to expand to Noida, Pune and Mumbai, as well as Tier II and Tier III cities like Kota and Jaipur.
“We plan to double the bed capacity to around 50,000 beds by 2025. We are aiming for 10x sales growth over the next three years,” says Krishna.
Colive has designed a massive expansion plan to disrupt the rental housing market. Founder CEO Suresh Rangarajan says: “Colive will expand to 10 metros in the coming year. We are also evaluating lucrative rental markets in the US.”
The startup is also launching Vanaprastha, a rental service for seniors in partnership with healthtech company Portea.
Meanwhile, Settl plans to add 2,000 beds in Hyderabad and Gurgaon this fiscal year while expanding to Noida, Pune and Chennai.
Housr intends to add around 12,000 more beds on board by FY23. It is expected to generate 70% of revenue from the coliving segment and the rest from Housr Homes.
“We plan to expand to cities like Chennai, Noida, Ahmedabad, Chandigarh and Jaipur. We also plan to raise between $20 million and $30 million in another round of funding over the next few months. The funding will help us grow 6-7x by March 2024,” says Founder CEO Deepak.
Rents go up
According to Your-Space, post-COVID-19 rents have risen with an average price of between Rs 15,000 and 16,000 and vary between metro and non-metro cities.
Rents have increased by an average of 20-25% compared to pre-COVID-19 levels, according to Colive’s Suresh. Demand for private rooms/larger studio apartments has increased by 80% as people want more space.
Sneha Choudhry, Co-Founder and CBO of Zolostays, agrees that customer expectations and demand have increased. “We currently have 65% professionals and 35% students and have seen a 10% increase in rents post COVID-19,” she says.
According to Settl, the average post-COVID-19 price is Rs 12,000-17,000 per bed per person, 20% above the pre-pandemic price.
Housr, meanwhile, claims to have increased its prices by 25% over the past six months. “Demand has increased by 10%. Several A+ and A-grade colleges have approached us to set up facilities near their campus,” says Deepak.
