Zolo Sells Student Accommodation Business For INR 108 Cr

Bengaluru-based coliving spaces provider Zolo is set to sell its student accommodation business to Mumbai-based Good Host Spaces Management Services for INR 107.8 Cr (around $12.5 Mn) via a slump sale.

The board of Zolo approved the startup’s proposal to sell its student accommodation vertical to Good Host Spaces on February 10, as per regulatory filings accessed by Inc42.

The transaction will be a mix of cash and debentures, with 90% of the consideration (INR 97.02 Cr) payable in cash, while the remaining 10% (INR 10.78 Cr) will be paid in the form of optionally convertible dentures (OCDs).

Inc42 has reached out to Zolo for comments on the development. The story will be updated based on the response.

Entrackr reported the development first.

“The sale will enable ZoloStays to focus on business operations and pursue growth opportunities. The lump sum consideration will improve the company’s liquidity position and strengthen its balance sheet. The transaction will allow the company to streamline its operations and improve overall efficiency,” the company said in a statement.

Founded in 2015 by Akhil Sikri, Isha Choudhry, Nikhil Sikri and Sneha Choudhry, Zolo offers affordable paying-guest accommodations, service apartments and independent flats to students and working professionals via its AI-powered app. 

It counts Investcorp, Nexus Ventures Partners, Mirae Assets and Trifecta Capital among its backers.

The startup presently has housing facilities in more than 10 cities across the country, and competes with brands, including Isthara, Stanza Living and Hosteller, among others.

In March 2023, Akhil Sikri stepped away from his operational role at the coliving startup to pursue a new entrepreneurial venture. Currently, he is the chief technology officer at Apsona, a software service provider.

Prior to that, Isha Choudhry who headed the operations and human resources quit in 2020.

On the other hand, Good Host Spaces was launched in 2017 by Nimesh Grover and Stanley D’britto, to offer third-party on-campus student accommodation services in the country.

The company claims to have a presence in about five cities, operating approximately 20,000 beds at universities such as Manipal University, OP Jindal Global University, T A Pai Management and Shoolini University. 

The development comes at a time when the hospitality industry has been attracting investments and acquisitions, with vacation season coming up close and the increasing tourist population.

Earlier this week, aviation giant IndiGo’s parent InterGlobe Aviation and French hospitality major Accor have announced a partnership to jointly invest in Treebo Hotels. 

Prior to that, Ritesh Agarwal-led hospitality giant OYO was looking to invest $10 Mn (INR 86.6 Cr) in its recently-bought G6 Hospitality, the US-based operator of the Motel 6 and Studio 6 brands, in February.

As per data from Tofler, Zolo’s revenue from operations rose 122.5% to INR INR 94.65 Cr in the financial year ending 2023, compared to INR 42.54 Cr from FY22.

Despite its strong topline performance, the company’s net loss for the year widened by 2% to INR 67.96 Cr in FY23, while it incurred INR 66.59 Cr in the previous year.