In a strategic move to refocus on its core business, Zolostays, a prominent co-living and home rental startup, has sold its student housing division to Good Host Spaces. The deal, valued at Rs 107.8 crore (approximately $12.5 million), will allow Zolostays to enhance its liquidity and concentrate on growth opportunities in its primary offerings.
The transaction, approved by Zolostays’ board through a slump sale, involves a substantial cash payment of Rs 97.02 crore (90%) and the remaining Rs 10.78 crore settled in the form of debentures issued by Good Host Spaces. The student housing business managed accommodation services for various colleges and universities, but this sale marks a shift in Zolostays’ strategic direction.
Good Host Spaces, which operates purpose-built student accommodations on campuses of leading universities like Manipal University, OP Jindal Global University, and Shoolini University, is set to benefit from the acquisition. The company has grown its footprint in the student housing sector, standing out in a competitive market. In October 2023, it was reported that Alta Capital acquired the 100% stake held by Goldman Sachs and Warburg Pincus in Good Host Spaces for $320 million.
The move aligns with Zolostays’ focus on strengthening its core business while improving its balance sheet and liquidity position. The company has also raised Rs 20 crore in debt via non-convertible debentures to VentureSoul Managers India LLP for business expansion and working capital.
Zolostays, which has secured over $110 million in funding, including a $56 million Series C round led by Investcorp and Mirae Asset, reported a year-on-year revenue growth of 11.4% to Rs 204.4 crore in FY 2024. The company also saw a 17.4% reduction in its losses during the same period, signaling positive momentum in its business operations.
This transaction highlights a shift in the student housing market, with Good Host Spaces gaining traction through its direct partnerships with universities and its expansive campus-based accommodations. As the student housing segment continues to evolve, the distinct approaches of Zolostays and Good Host Spaces will shape how the market progresses in the coming years. The handling of the acquired business will be crucial as Good Host Spaces navigates this new addition to its portfolio.
