Nestaway arm plans to acquire 2-3 co-living operators; aims to touch 50K beds by March 2021

In September last year, Nestaway Technologies, which is into rental property management, had announced foray into the co-living business and set up a 100 per cent subsidiary 'The Hello World' to provide rental accommodations to both students and professionals. "We currently have around 20,000 beds across 17 cities.

Nestaway Technologies' co-living subsidiary The Hello World has acquired StayAbode and is looking for 2-3 more acquisitions as part of its plan to expand capacity to 50,000 beds by March next year. The Hello World currently has 20,000 beds and plans to add 30,000 more beds by end of the 2020-21 fiscal through both organic and inorganic routes, its founder and CEO Jitendra Jagadev told PTI.

The annual revenue of the coliving firm stood at Rs 40 crore last fiscal which is likely to jump at Rs 140-150 crore in the current financial year, he said. In September last year, Nestaway Technologies, which is into rental property management, had announced foray into the co-living business and set up a 100 per cent subsidiary 'The Hello World' to provide rental accommodations to both students and professionals.

"We currently have around 20,000 beds across 17 cities. Out of this 15,000 beds are meant for working professionals and rest for students," said Jagadev. "We are targeting to reach 50,000 beds by March 2021. We are in discussions with landlords across various cities to take their properties on lease model," he added.

Jagadev said the company had few months back acquired StayAbode, having a capacity of 2,000 beds and looking for more such acquisitions. "We are targeting to acquire at least 2-3 co-living operators each having an enterprise value of USD 10 million or more," he said. Asked about the planned investment on expansion, Jagadev said it would not be much as capex on setting centres are borne by the landlords.

The acquisitions would also be largely stock deals with small components of cash, he added. On the COVID-19 impact, Jagadev said the revenue fell during April-May period as students left to their native place from educational hubs like Kota in Rajasthan due to outbreak of coronavirus pandemic.

He said the company is currently focusing on the working professional side of business and expect that students will also return once health situation stabilises. At present, Jagadev said the average occupancy level at its centres is around 65 per cent. Amid health, safety and hygiene concerns, he said the company has adopted end-to-end digital technologies, like virtual walkthroughs, for search, shortlisting and booking apartments on rent.

He said the company is offering discounts for those prospective tenants who are looking for private rooms and do not want to share space with other people. Jagadev said the company is providing high internet speed, 24/7 power back up and free meeting rooms to enable work from home.

Founded in 2015, NestAway caters to individuals looking for affordable rental housing in the top cities in India. The company, through the acquisition of Zenify in May 2017, has also entered the family rental solution business. Nestway has raised around USD 100 million so far from investors including Goldman Sachs.

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