An online booking platform meant to help international students find places to live while visiting other countries has just announced that it has brought in $60 million from investors, which includes the founders of Spotify and one of the richest men in Asia.
Led by VY Capital, the investment also received participation from Horizons Ventures, the venture capital fund of Li Ka-Shing, the Hong Kong tycoon, as well as Spotify founders Daniel Ek and Martin Lorentzon and Hugo Barra, Xiaomi’s Vice President of International and former Google executive. Barra had previously helped to run the Android operating system and more recently has found employment with Chinese smartphone company Xiaomi Corp.
The startup, Student.com, operates in a similar fashion to Booking.com and specializes in university accommodations. The site is free for students to use, while landlords who rent accommodations are charged a commission based on local market conditions. These landlords are carefully chosen by the site in order to ensure high-quality accommodations to those seeking them. In exchange, landlords are offered help to better present their properties, including the use of a professional photographer who will take photos and writers to help fill out the profiles, writes Jeremy Khan for Bloomberg.
“We provide landlords with global reach and scale which means access to international students in hundreds of countries across the world,” say the founders when asked how they incentivize landlords to sign up. “We also bring significant value in making the marketing and booking process much smoother from end to end.”
The site expects to expand their operation to include 426 cities around the world with access to over 1,000 universities. Properties are currently listed in 300 cities worldwide.
In addition, the funding will help with new key hires which will increase the 200 employees already at work in seven cities, including New York, Shanghai, and Hong Kong.
Founder Luke Nolan told Arjun Kharpal of CNBC that the money raised would be used for marketing for the website in order to increase its user base. He added that investors were carefully chosen, with all of them having experience in overcoming challenges within the market the start-up is looking to expand into.
Nolan believes places like Latin America, South Africa, Singapore and Malaysia to be of increasing importance for his company.
The company did $110 million in bookings last year. Although the 2014 figure was not disclosed, Nolan said the growth has been “significant,” adding it has “more than doubled” each year. Every landlord holds a contractual relationship with the company that offers additional security measures.
“Imagine you moved from Shanghai to London, you have never been there, you don’t know anyone there. Every single time you have an international student moving abroad, you face this challenge,” Nolan said.
Nolan met co-founder Shakil Khan in 2005 while living in China. While living there the pair began to notice the large amounts of Chinese students who were moving to study abroad with no place to live arranged beforehand. As a result, the two decided to form Overseas Student Living in 2011, which has since transformed to become Student.com.
Student.com is not the only company trying to find a place in this newly-growing market. Competitors Comfy recently raised $1.25 million in funding, while a separate company called UniPlaces has raised $24 million.