Zolo Divests Student Housing Arm to Good Host Spaces for $13 Million

In a strategic move to sharpen its focus on the co-living sector, Bengaluru-based Zolo has sold its student accommodation vertical to Mumbai-based Good Host Spaces Management Services for approximately $13 million (INR 108 crore). This decision underscores Zolo's commitment to consolidating its position in the burgeoning co-living market, catering primarily to young professionals and urban migrants.

Deal Structure and Financials

The transaction, approved by Zolo's board on February 10, 2025, comprises 90% cash payment (INR 97.02 crore) and 10% in optionally convertible debentures (INR 10.78 crore). This financial arrangement provides Zolo with immediate liquidity while retaining a potential upside through the convertible instruments.

Strategic Realignment

Founded in 2015, Zolo has been a significant player in India's co-living space, catering to both students and working professionals. The divestment allows Zolo to streamline operations and concentrate resources on scaling its co-living services, which have shown robust demand in urban centers. With plans to manage one million beds by 2025, Zolo aims to enhance its technology infrastructure, improve customer experience, and expand its footprint across major cities. 

Industry Context

The Indian student housing market has attracted significant investor interest, with companies like Stanza Living expanding rapidly. Stanza Living, for instance, reported a 2.9X growth in revenue to INR 115 crore during FY22.

Good Host Spaces, the acquirer, is India's largest owner and operator of purpose-built, on-campus student housing assets. Established in 2017, the company operates approximately 25,000 beds across five cities and partners with prestigious institutions like Manipal University and O.P. Jindal Global University.

Future Outlook

With the proceeds from the sale, Zolo plans to enhance its technology infrastructure, improve customer experience, and expand its footprint across major cities. This strategic realignment positions Zolo to capitalize on the evolving preferences of urban dwellers seeking flexible and community-driven living arrangements. As the co-living landscape in India matures, Zolo's renewed focus could strengthen its competitive edge and drive sustained growth in the sector.