Funding for co-living startups has rebounded this calendar year after three consecutive years of decline, with the sector raising $81.7 million year-to-date — nearly ten times the $8.44 million raised in 2024.
According to Tracxn data, the sector had peaked at $143 million in 2021 before falling to $75.2 million in 2022, $30.4 million in 2023, and hitting a trough last year. Debt financing has also returned after a two-year gap — three rounds in 2025 compared to none in 2023-24.
Capital Comeback
During this year, Stanza Living, the sector’s largest player, raised $31.9 million in a Series E round led by Accel and Motilal Oswal, along with $7 million in debt from Alteria Capital and Innoven Capital. The round reportedly came at a lower valuation than previous rounds, despite improved financials – FY24 losses narrowed 45% year-on-year to Rs 273 crore on operating revenue of Rs 584 crore.
Colive raised $20 million in a Series B led by Bain Capital and Sattva Group. The round is part of a larger $100 million commitment to acquire land and develop purpose-built co-living assets, a shift from the lease-based model that defined the sector’s early years. The platform has completed initial acquisitions in Pune and Bengaluru, with nearly 500,000 square feet under development. Your-space closed a $5.88 million Series A and $8.06 million in debt. Hyderabad-based Tribe raised Rs 25 crore in debt, while Prime Stays closed a $2.8 million seed round.
The sector is also seeing consolidation. In April, Bengaluru-based Zolo sold its student housing vertical to Good Host Spaces for Rs 107.8 crore to focus on its core rental business. Good Host Spaces, backed by Alta Capital, operates on-campus housing at institutions including Manipal University and OP Jindal Global University.
Strategic Pivot
Mayank Pokharna, a co-living sector consultant, said the revival reflects a maturing market. “The sector is clearly moving towards an asset-heavy model over the traditional asset light model. The traditional lease model had left operators bearing disproportionate risk. Landlords would collect fixed rent regardless of occupancy, while recent rental reforms such as deposit capped to two months and dispute tribunals have favoured tenants.
Operators had found themselves caught in the middle. Asset ownership offers a reprieval with higher margins, capital appreciation, and a clearer exit path through REITs,” he said. Demographic shifts are also helping. “The median age of first-time home buyers in the US has crossed 40. India is trending similarly. Average marriage ages have gone up from 20-25 to 30-35, that’s five more years of renting for a whole generation,” he added.
A May 2025 Colliers report projected organised co-living inventory to triple from 0.3 million beds to nearly 1 million by 2030, with the market growing from Rs 4,000 crore to Rs 20,000 crore. In 2023, 41 of 116 co-living firms had shut down amid a funding freeze, with the sector’s highest-valued players facing vendor dues and layoffs. Two years on, the survivors seem to have emerged leaner, and capital is returning over a renewed asset heavy playbook.