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Student.com, a London-based booking site for international student accommodations, landed a $60 million funding round led by VY Capital and with participation from Horizons Ventures, Expa, Spotify founders Daniel Ek and Martin Lorentzon, and Hugo Barra from Xiaomi.
More than five million students are currently studying abroad and the number of higher education students going overseas to study is growing at a rate of 6.4% each year. Student travel is an estimated $200 billion global market, though Luke Nolan and Shakil Khan, founder/CEO and co-founder of Student.com, respectively, feel that number is much higher and that the travel industry doesn’t know how to accurately measure student travel’s economic impact.
Student.com was founded in 2011 and handled accommodation bookings from more than 100 countries last year amounting to $110 million in bookings. It recently reached 200 staff members and has offices on five continents.
Many college students go abroad through their school’s study abroad program which often coordinates housing as well but Nolan said those programs are Student.com’s partners in several cases and that the site helps them find accommodations for individuals and groups of students.
“We’re finding that for many of our international students this is there first time traveling abroad on their own,” said Khan. “They may have traveled with their family at a younger age and now a whole new generation of consumers are starting their journeys in the travel world. These are individuals who were probably born in the [1990s] who probably never went through the whole travel agent scenario. They’re used to everything in a digital world. But the student housing market is largely not yet digitized.”
The new funding will help the site expand across the U.S., Latin America and the Middle East in the coming months. The site’s largest source markets are China, Hong Kong and India and the most year-over-year growth comes from students traveling abroad from India, South Korea and Nigeria. For this academic year cycle (November 2015 to October 2016) it has 750,000 beds across 426 towns and cities which serve about 1,000 universities. The site also has contracts with each individual landlord it works with and personally meets and vets each one.
Fewer than 10% of college students in the U.S. study abroad, for example, and the 90% who don’t point to cost as the greatest reason for not spending a semester in a foreign city. In Sydney, a big market for Student.com, accommodations on the site range from $212 to $283 a week, while for London rooms start at $217, depending on the location and distance from a university. The site insists its rooms are the most affordable options available to students.
Parallel to that are weakening currencies such as the Euro, Brazilian Real, and Chinese Yuan against the U.S. Dollar and other major currencies. Khan said Student.com hasn’t seen any negative impact to bookings year-over-year but has noticed some students have changed their initial plans.
“We’re probably starting to see signs of some impact because when we’re talking to students and parents they’re asking whether there are more affordable options for city X or city Y versus the city that may have originally been their first choice,” said Khan. “We’re part of this long-term cycle where families have saved up and they don’t necessarily make their decision based purely on cost so they’re not canceling their study abroad plans outright.”
This latest funding round puts Student.com’s total funding at slightly more than $60 million after originally receiving a smaller seed round after launching and then bootstrapping.