Anindya Dutta (left) and Sandeep Dalmia, co-founders of Delhi-NCR based student co-living startup Stanza Living
Image: Mexy Xavier
What does it take for a startup to stand out in the over-cluttered student housing market—estimated to be at a staggering $15 billion, highly unorganised and dominated by mom-and-pop offerings? For Anindya Dutta and Sandeep Dalmia, co-founders of Delhi-NCR based student co-living startup Stanza Living, the magic lies in understanding the difference between 'room' and 'home.' While others offered 'rooms' to students, Stanza claims to provide an 'experience.'
Stanza aims to elevate its offerings with high-quality facilities, says Dutta, an IIM-Ahmedabad alumnus who also holds a dual degree in biotechnology and biochemical engineering from IIT-Kharagpur. These services include food that is regularly tested in labs, vending machines, high-speed internet, biometric and motion-detector camera security, laundry and concierge services, a doctor on call and exclusive offers with partner brands such as UrbanClap and Zomato. Stanza also organises various social events for its students, such as movie screenings, guest speakers, game nights and so on.
"We are not that neighbourhood aunt who wants to make an extra buck leasing the top floor to as many students as possible," says Dutta, underlining one of the vexing issues of this segment. "Nor are we fly-by-night property developers who build hostels to maximise short-term returns," adds Dalmia. "We understand the pain points of students: No bills to pay, no maintenance and repairs to worry about, no maids and cleaners to deal with, and no neighbours to morally police you.”
Started in April 2017 with two 50-bed capacity residences in Delhi, Stanza—which works on an asset-light full-stack model—has grown 20 times to operate more than 16 residences in Delhi-NCR, with a capacity of more than 2,000 beds. As the brand readies to spread its wings outside Delhi-NCR, rolling out operations in Bengaluru, Hyderabad, Chennai, Pune, Dehradun, Indore and Ahmedabad, the question is: Can it live up to its billing and provide the same, standardised experience?
With monthly rentals ranging from Rs 5,000 to Rs 20,000, Stanza's proposition of a 'hassle-free' living experience for students has made it an attractive bet for venture capitalists. Backed by marquee investors such as Sequoia Capital, Accel and Matrix Partners, the largest funded player in the student housing segment has raised $12 million so far, including the last round in September last year when Sequoia led an investment of over $10 million.
"They have had a promising start but scaling fast and across new geographies might test the startup," says Anil Joshi, founder and managing partner at Unicorn India Ventures. In fact, the biggest opportunity, which comes from it being a fragmented market, might turn into their biggest challenge. "The way they handle the pressure of ensuring 100% occupancy would determine their next phase of growth," Joshi says.
The beginning was not easy for Stanza. One of the biggest challenges was educating landowners of the potential of organising the highly competitive student housing industry. "We spent a significant amount of time explaining property owners our value proposition," recalls Dutta, whose experience with the student housing market in the UK, US and Europe, while working with London-based private equity firm Oaktree Capital, was a strong impetus in driving interest in the sector. While exploring the viability of the concept in India, the co-founders identified two big gaps in the market: Lack of quality infrastructure and personalised services.
What also helped the duo was extensive research. Unlike the West, where housing is just a real-estate product, in India, the offering also had to have another layer: Service-led proposition. The stakeholders, parents and students, wanted an organised, high quality set-up that promised a great service experience. "They were willing to pay a premium for this as well," Dalmia says, adding that expectation of parents and students cuts across demographics and geographies. "Over 45 percent of our students are from Tier-3 and 4 cities," he says.
Dutta is confident they can tackle the new challenge. “A focus on delivering high-quality products and services, through a full-stack business model along with a technology backbone, will help Stanza during its leap of growth,” he says.