Co-accommodation businesses have been disrupted by the COVID-19 pandemic and the second wave is making the situation worse. The suffering has engulfed the entire sector and large-scale companies such as Oyo and NestAway have downscaled their operations whereas many are going through a very rough patch.
Early this month, we had written about ZiffyHomes’ struggle and how it’s staring at an uncertain future. And now, Kalaari Capital and Times Internet-backed Oxfordcaps, which too had experienced severe financial stress, has been acquired in a fire sale by Altruist Technologies that runs bachelor-focused co-living platform Abuzz.
Anuj Aggarwal, co-founder and chairman of Altruist, confirmed the acquisition to Entrackr.
According to Entrackr’s sources, Oxfordcaps had begun downscaling its operations a few months after the pandemic began due to severe financial stress.
“It had taken every measure to cut costs including a mass layoff and even rang the emergency bell to investors for a bridge round. However, none of the existing backers came forward to its rescue,” said one of the sources requesting anonymity.
The crisis also reflected in the company’s filings as it showed that it had defaulted in making three debenture repayments during the fiscal ended in March 2020.
“Since the follow-on funding was unseen and the financial condition had deteriorated further, Oxfordcaps’ management had started looking for opportunities to consolidate from November,” said the second source who also wished not to be named.
According to the sources, the company was in the market for a merger and acquisition deal, however, there was no interest from major players in the co-living space.
“By early January, the management had initiated talks with Abuzz and later the deal was finalised,” said the person quoted at the beginning of the story. “The deal is a distress sale and investors would hardly recover anything out of it.”
The acquisition process that began in February is still underway and filings show that Oxfordcaps has appointed Lalit Kumar, a representative of Altruist Technologies, to its board of directors.
Following the acquisition, Oxfordcaps’ branding has been changed across its social media accounts too. The company now carries the ‘Abuzz’ branding as a prefix and is now known as ‘Abuzz Oxfordcaps’.
Priyanka Gera, one of the two co-founders, had moved from the company in March as per her LinkedIn profile. The sources said that Annu Talreja, the other co-founder, is also set to resign. To make way for Talreja’s exit, Oxfordcaps had bought out her share in its Singapore based subsidiary in May last year.
Entrackr reached out to Gera for comment but she declined and directed us to reach out to team Abuzz.
According to Aggarwal, Oxfordcaps’ debt has been restructured so no outstanding debenture repayments remain. He also confirmed the changes in broad management at Oxfordcaps, which are currently underway.
“Oxfordcaps exists and will continue as an independent entity focussed on students. Abuzz is in the broader segment of bachelor accommodation. The entities remain separate but there will be sharing of properties as well as overlap of teams,” Aggarwal said.
Founded in 2017, Oxfordcaps has raised over $8 million including a Series A round from the likes of Kalaari Capital, Times Internet and 500 Startups. Its seed round was sourced from 500 Startups, ReadyVentures and a clutch of angels.