Zolo (earlier known as Zelo), a Bangalore-based startup providing a platform for managed co-living spaces in India, has secured US$5 million in Series A funding led by existing investor Nexus Venture Partners, which recently invested in e-learning startup Unacademy.
Debt venture capital firm InnoVen Capital has also co-invested.
Zolo plans to use the capital to grow aggressively to reach from 5,000 locked-in beds to over 12,000 beds, and expand to Chennai and Delhi-NCR by the end of this year.
The startup was founded in September 2015 by Dr. Nikhil Sikri and Akhil Sikri. Zolo brings affordable managed living by providing a comfortable place to stay, daily meals, housekeeping, firewall managed Wi-Fi, through an integrated app-based technology platform at locations near large office clusters in Tier I cities. Rentals start from INR 5,000 (under US$75) a month.
Zolo aims to redefine the paying guest (PG) industry which caters to thousands of young professionals across the country. Currently, the industry is in dismal state with no standardisation, extremely poor serviceability and very low customer satisfaction.
CEO Nikhil said: “I always wanted to make a direct impact on people’s lives — the ethos that got ingrained during my career in medicine. Improving lives of thousands of people, through redefining an industry, was something which immediately came close to heart. For me, ethos hasn’t changed, the method has.”
Zolo’s offering is largely targeted towards young folks who want to live in a fully managed setup. It provides daily meals for an entire month in just INR 1,699 (US$25) and centralises its kitchen operations to provide best-in-class meals with substantial options for its residents. Housekeeping and Wi-Fi are complimentary.
Sameer Brij Verma of Nexus added: “We believe there is a large market gap in the managed affordable living space targeted at students and young professionals moving into larger cities for employment and education opportunities. Zolo’s first principles approach to building a scalable cost-effective execution engine managed by their strong technology platform has allowed them to emerge as a leader in the market in a short duration.”
Zolo has also partnered with large builders to start the concept of fully managed accommodations, which is common in large cities such as Hong Kong and New York City. Real estate builders have shown interest in partnerships with Zolo to build a rental yield asset play as they increasingly feel the need to add rental income yield for their investor base.