The pandemic broke co-living’s back. Startups need a reset

livemint.com:

₹2.5 crore every month, Jitendra Jagadev, co-founder and chief executive officer (CEO) of HelloWorld and NestAway, said. HelloWorld, which was operating 7,400 beds pre-acquisition, manages around 15,000 beds today. Nestaway has scaled to 20,000 rental units from 15,000 units.

Jagadev said costs were drastically brought down to improve profitability. And operations were halted in a few cities that were not profitable. “By leveraging technology, operational efficiencies were enhanced, which has significantly reduced people and other direct costs," he said.

Co-living is the residential version of the co-working model, where companies operate shared living facilities on a monthly rental basis. As per data by Tracxn, there are 119 Indian co-living startups, 68 of which are active. The sector dates back to 2015.

It has undergone a sharp churn. To begin with, funding has been hard to come by—it plunged from $128.7 million in 2021 to $14.6 million in 2023. Many early operators didn’t survive the multiple challenges of an operationally heavy business, fund-raising and occupancy pressure, which led to the basic business model being questioned.

The largest and most-funded startup in this space, Stanza Living, is also losing more money than it earns. Going by data from Tofler, Stanza Living, which provides student housing and co-living accommodation and is backed by Alpha Wave, Matrix Partners and Accel, clocked ₹442 crore in revenue from operations in 2022-23, compared to ₹115 crore in 2021-22. It posted a loss of ₹495 crore in 2022-23 compared to ₹417 crore in the preceding year.