DigsConnect.com, a South African digital student accommodation platform, has secured a multimillion-rand investment from Launch Africa, Goodwater Capital, Five35 Ventures and Delta Ventures.
The funds will be used to spearhead international growth, with a focus on helping African students in the UK and US secure more affordable, convenient and safe housing.
Launched in 2018, DigsConnect.com says it has achieved 300% year-on-year growth after university students returned to campus post the COVID-19 pandemic. The start-up now lists 1.3 million beds worldwide.
DigsConnect.com was created from the ground up by Alexandria Procter and Greg Ramsay-Keal to match landlords with students looking for accommodation.
According to DigsConnect, the student housing sector is booming, with global investment into purpose-built student accommodation exceeding $16 billion in 2018. Despite the pandemic, this asset class is resilient and still growing rapidly as student enrolment continues to increase.
Alexandria Procter, co-founder and CEO of DigsConnect.com, says: “The tech start-up industry is experiencing a funding winter at the moment, so the fact that we received so much early support from excellent Pan-African and US investors speaks volumes about the strength of the team, the value of our strategic partnership with Student.com, our strategy of early profitability and sound unit economics.”
“This investment provides interesting portfolio connectivity to several of our 115 portfolio companies that are interested in bettering university students globally,” says Zach George, Launch Africa Ventures general partner.
Five35 says it has a decade-long track record of venture building alongside some of the smartest female-led founding teams in Africa, backing female-focused start-ups across multiple sectors in Africa.
“As a leading gender-lens fund in Africa, we see our partnership with DigsConnect.com as an excellent opportunity to add value to a mission-aligned, female-led start-up,” says Hema Vallabh, partner, Five35 Ventures.
“Five35 is excited to be supporting Alexandria and her team as they strive to democratise the massive student housing market across the African continent, already seeing great traction and scaling full steam ahead.”
Ramsay-Keal, co-founder and COO of DigsConnect.com, says: “Many of the next-generation of African leaders are pursuing their studies in the UK, Ireland, Canada, US and Australia, before returning home to Africa to grow the regional African economies and partake in nation building. It’s incredible to be a part of such a pivotal part of Africa’s development.”
Procter and Ramsay-Keal started DigsConnect.com while they were both Student Representative Council members at the University of Cape Town, after Procter was being inundated with requests from students to help them find accommodation.
Spotting this gap in the market, they built the DigsConnect.com solution to replace the antiquated system currently in place across the country after initially raising R14 million.
They say DigsConnect.com has now grown to become one of the largest providers of accommodation for students in Africa, helping students connect with potential housemates and rooms, centralising all types of “digs” in one place and helping to ensure no student is homeless.
Procter says changing the company’s entire business model to become self-sufficient was risky but has paid off in the long run.
“It made DigsConnect.com a very attractive, investable and profitable business and we believe investment should be seen as a tool for amplifying business growth rather than a tool for survival.”
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