The founders and early backers of Spotify are investing $60m in Student.com, an online housing marketplace co-founded by a former executive at the Swedish music streaming service.
The site connects international students looking for accommodation abroad with vetted landlords, exploiting a niche in the property market that has long remained fragmented and offline. Student.com is the first start-up investment made by Daniel Ek and Martin Lorentzon, Spotify’s co-founders. Shakil Khan, the Swedish company’s former head of special projects, joined Student.com as a co-founder in 2014 alongside chief executive Luke Nolan and JP Jones, head of technology.
VY Capital, the venture capital firm founded by Alexander Tamas, a former partner at Digital Sky Technologies, led the round. Other investors include Horizons Ventures, the tech investment fund of Hong Kong billionaire Li Ka-shing, Xiaomi executive Hugo Barra, and Expa, a start-up studio led by Uber co-founder Garrett Camp. DST and Horizons were both investors in Spotify several years ago, which is now valued at $8.5bn.
Mr Khan said they were attracted by the large untapped market. “You have to look it over a few times to go, ‘How can there still be in 2016 such a huge opportunity of an industry that hasn’t been digitised’,” he said.
“The investors we brought in are incredibly international, which helps us a lot,” Mr Nolan added. “We can learn from that experience of investing and building companies in a lot of different markets.”
He said the new funds would be used to build out its technology and recruitment.
Originally founded as Overseas Student Living in 2011, the company was rebranded as Student.com last year. Despite being a little-known name in the tech start-up world, the company has seen rapid growth, with $110m in bookings made through its site last year.
“The student housing market is one of the largest untapped real estate opportunities in the world,” said Mr Tamas.
Students from more than 100 countries have used the website to find housing. With an estimated 5m students studying abroad every year, Student.com lists more than 750,000 beds for the coming academic year.
Mr Nolan started the site after friends kept asking for help finding places to live in Shanghai. The service is free for students, with the company charging landlords a fee on completed rentals.
Student.com has more than 200 staff based in London, Shanghai, New York and Hong Kong, including managers recruited from the likes of Facebook and Airbnb.
Get alerts on Daniel Ek when a new story is published