South Africa’s student housing startup DigsConnect secures investment to spearhead international growth
DigsConnect.com, South Africa’s digital student accommodation platform, announced the closure of its Pre-Series A seed extension round after securing undisclosed multi-million 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.
Alexandria Procter, Co-founder and CEO, DigsConnect.com: ''The tech startup 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.''
Launched in 2018, DigsConnect.com has achieved 300% year-on-year growth after university students returned to campus post-Covid. The startup now lists 1.3 million beds worldwide. 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 skyrocket.
Zach George, General Partner, Launch Africa Ventures: ''The DigsConnect.com PropTech marketplace’s revenue traction, smart customer and inventory acquisition strategies, and strong founding team appeals to us as does the substantial total addressable market (TAM) in student housing. This investment provides interesting portfolio connectivity to several of our 115 portfolio companies who are interested in bettering university students globally.''
Goodwater Capital is a Silicon Valley venture capital fund, with a history of investing in consumer facing tech startups including the likes of Monzo and Facebook. Their investment cements DigsConnect.coms position as an up-and-coming international powerhouse in the realm of PropTech. Five35 has a decade-long track record of venture building alongside some of the smartest female-led founding teams in Africa, backing female-focused startups across multiple sectors in Africa.
Hema Vallabh, Partner, Five35 Ventures: ''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. 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.''
Delta Ventures is a Berlin-based venture catalyst that has had a strategic relationship with DigsConnect.com for several months already, cementing this partnership by partaking in this round. This group of highly connected investors will allow DigsConnect.com to scale global operations and significantly amplify its growth strategy.
DigsConnect.com was created from the ground up by then 24-year-old student Alexandria Procter and cofounder Greg Ramsay-Keal to match landlords with students looking for accommodation. Alexandria and Greg started DigsConnect.com while they were both Student Representative Council members at the University of Cape Town, after Alexandria was being inundated with requests from students to help them find accommodation.
Spotting this gap in the market, Procter and Ramsay-Keal built the DigsConnect.com solution to replace the antiquated system currently in place across the country. After initially raising R14 million, DigsConnect.com has now grown to become the largest provider 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.
During a tumultuous time for businesses over the pandemic, Alexandria and Greg switched focus from funding to ensuring the company could be self-sufficient. The plan for the business changed from raising money to securing revenue, ultimately helping the company’s growth prospects.