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Falcon Edge may invest $30 million in Stanza Living

Stanza Living is believed to be in the process of raising about $50 million in fresh financing.

, ET Bureau|
Updated: May 15, 2019, 10.47 AM IST
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Falcon Edge, which has an estimated $4 billion in assets under management, is currently undertaking due diligence.
NEW DELHI: New York-based investment firm Falcon Edge Capital could invest up to $30 million in Delhi-based student accommodation venture Stanza Living, two sources aware of the development said, as investor interest in the sector continues to heat up.

Falcon Edge, which has an estimated $4 billion in assets under management, is currently undertaking due diligence, the sources said. Stanza Living is believed to be in the process of raising about $50 million in fresh financing. “There has been a lot of inbound interest from a variety of investors, and Stanza Living is in the final stages of conversations with three to four global marquee investors,” said one of the sources.

The proceeds will be used to strengthen scale and operations in existing cities, enhance its tech platform and possibly even look at buying out competitors, the source added. Falcon Edge has begun ramping up its presence in India over the last six months.

The firm, which co-led a $22-million funding round in logistics management startup Locus on Tuesday, has already backed ride-hailing major Ola, mobile PoS device maker Mswipe Technologies and NBFC Aye Finance in 2019 alone. Emails sent to Anindya Dutta, cofounder of Stanza Living, and Falcon Edge Capital did not elicit any responses until press time. The company’s funding so far is just shy of $17 million.

Stanza Living, founded by IIM Ahmedabad alumni Dutta and Sandeep Dalmia, counts three marquee venture capital firms — Sequoia Capital, Accel Partners and Matrix Partners — as well as venture debt firm Alteria Capital, among its list of backers.

The company has more than 20,000 beds across 10 cities. It plans to increase that to 1 lakh beds by year-end.

Falcon Edge Capital, which is often referred to as a ‘Tiger grand cub,’ is also believed to have held discussions to potentially invest in Bengaluru-based home rental startup NestAway Technologies earlier this year, with the latter having entered the student housing space as well, underscoring the investment firm’s interest in the segment. However, it is yet unclear if the parties are still in talks for a potential investment.

Compared to the West, where the market is estimated at $200-$300 billion, India’s student accommodation segment is a highly-fractured and under-penetrated space, where demand has far outstripped supply.

However, with SoftBank-backed OYO also eyeing the segment, multiple capital raising transactions are expected to fructify over the course of the current fiscal, as companies rush to expand to newer locations, add beds and provide other value-added services. Gurgaon-headquartered OYO Hotels & Homes expects to mark its entry into the sector by next quarter, through its long-term rental and managed residential business, OYO Life.

“We do not see student housing as a separate category, but as a sub-category. We are serious about it (student housing), and we will be surprised if it takes us more than a quarter for us to enter the space in India,” Rohit Kapoor, chief executive - new real estate business at OYO, had told ET earlier.

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