South African online student accommodation marketplace, DigsConnect.com has entered into an agreement with the world’s largest student accommodation site, Student.com, enabling the start-up to expand its presence to 30 new countries and 400 new cities in the next six months.
DigsConnect was founded in 2018 and is a service to students and landlords, matching students to suitable accommodation in the areas around universities and colleges. The platform has to date, connected more than 65000 landlords and tenants.
DigsConnect.com chief executive and co-founder Alexandria Procter explained that the service was free or students and also free for landlords to create listings on DigsConnect, although they went through a vetting process to ensure that their standards were up to scratch.
“If a landlord successfully finds a tenant via our platform, DigsConnect charges them a 3.5 percent success fee on the lease value. Each student is then assigned a "booking concierge" from DigsConnect that helps them navigate the world of rentals,” she said.
Luke Nolan, the chief executive and the founder of Student.com, said that he was excited to watch the partnership come to life.
“Our global network combined with the reach and experience of DigsConnect.com in South Africa will create a strong foundation for growth, especially as South Africa is such a popular student destination,” said Nolan.
“More than anything, this partnership is built from the Student.com and DigsConnect.com culture. We share the same vision and live the same values – it’s exciting to partner together to help even more students globally.”
Procter said in an interview with Business Report that she had contacted Luke Nolan, the chief executive and founder of Student.com, in July, and “that's how we kicked off the professional relationship between Student.com and DigsConnect.”
"We realised very quickly that there was something special here, and working together we could create something global and take Africa to the rest of the world in terms of student housing. In September, all of us met up in Dubai for a week of planning, meetings and workshops, which is where the deal was signed,“ she said.
When asked about the challenges of going global, Procter said: “The partnership will see us operating in hundreds of cities worldwide, and we currently have a team of 7! The Student.com team is fantastic, and I'm sure we'll be leaning on them a lot as we scale to accommodate for this hyper-growth.”
“The last 18 months have been tough for the property sector in South Africa, which has been among the hardest hit due to Covid. I believe that part of what this partnership signifies is the student accommodation sector bouncing back as we gear up to welcome local and foreign students back to our universities, campuses, and country for the 2022 academic year,” she said.
Asked about local competitor firms, she said: “We have no competitors in South Africa or across Africa. Covid and the lockdowns were tough on the property sector, and would-be competitors mostly liquidated or gave up.”
Procter said it was an exciting time for the business, best known for its record-setting R12 million seed investment in 2019. The agreement with Student.com comes off the back of an additional investment raise in early 2021, which aided the decision to investigate international expansion.
The company, this week, also announced it had secured $200 000 (R2.95m) funding from the Michael And Susan Dell Foundation, which will see DigsConnect.com rollout the #1000digs initiative where it will set up a specialised programme to assist National Student Financial Aid Scheme and bursary-funded students across South Africa seeking accommodation.
Procter said the primary growth regions for DigConnect.com include the US, Europe and Asia-Pacific.
“Growth in the Northern Hemisphere is important due to the academic calendar – with international operations, we’ll be able to take advantage of the academic seasons in both September (Northern Hemisphere) and again in January, our own South African peak period. This diverse geographic representation gives us multiple seasons a year, allowing us to bring in revenue year-round and have continual feedback cycles to continually improve our product and services,” said Procter.
“We will leverage the partnership and resources from our recent funding to quickly cover the rest of the continent to provide our services. What I find most exciting about this partnership is that it puts Africa on the map for international students. We're opening the door to them and saying ’come study in South Africa.’ We want this to open more links between our continent and the rest of the world, to encourage travel, open borders, internationalisation, tourism and the free flow of people. Let's get business flowing into South Africa,” she said.
Looking ahead, Procter has her sights set on the firm becoming the Airbnb of student accommodation.
She said Covid-19 and the lockdowns had thrown a spanner in the works.
“We were on a phenomenal trajectory as we entered 2020, and then March came, and the property sector all but collapsed, and every venture capital and funder in the country went cold. Not a great time to be a young PropTech startup. The 18 months that followed, were extremely difficult for ourselves and our clients -the landlords we work with - and we had to adapt fast to survive,” she said.
But, Procter said it had forced her to learn a lifetime of business skills in only a few short months. During some of the toughest days, someone sent a Winston Churchill quote to her, "Never let a good crisis go to waste".
“That galvanised me to pick myself up and put everything I've got into this company. I think that's what gave me the inspiration to reach out to Luke.”