Acumen Invests in Aarusha Homes to Address the Housing Problem for India’s Migrant Population
Acumen announced today its new investment in Aarusha Homes, a chain of professionally managed hostels catering to the growing migrant population in India’s cities. The company, which provides migrant students and workers with affordable temporary accommodation, is helping address the country’s urban housing shortage while also improving education and employment outcomes amongst the migrant population.
In the last two decades, India’s urban population has increased by 73 percent—many of whom are migrants who come to cities in search of jobs, educational opportunities and better standards of living. However, finding quality, low-cost housing in India’s cities is a major challenge. One fifth of the country’s urban households are substandard, lacking access to clean water and toilets as well as basic cooking and bathing facilities.
“By providing young migrant students and workers with safe, affordable and quality housing, Aarusha not only enables them to live with dignity but also significantly improves their ability to sustain better livelihoods,” said Ajit Mahadevan, Acumen’s India Director. “There are few innovators in the temporary housing space. At Acumen, we focus on building the skills of workers in both the formal and informal sectors, a large portion of which is migrant labor, and recognize the importance of producing support systems that enable them to thrive once they leave home.”
Aarusha currently operates 16 hostels across Bangalore, Hyderabad and Pune, using a sliding- scale model to rent its beds to meet the needs of the migrant population. Tenants pay an average monthly price of INR 5,000 for single beds, but can opt for shared rooms with one to six beds per room. The price includes access to common bathrooms and living spaces, unlimited electricity, hot water and 24/7 security. Tenants also have the choice of adding services, such as food plans, Internet and printer access and washing machines through a pay-as-you-go model, taking into account the migrant population’s inability to make long-term financial commitments.
The majority of Aarusha’s tenants range in age from 18 to 30 years, make a monthly income of INR 6,000 to 30,000, and work in the BPO, IT, retail, pharmaceutical and construction sectors. Because 40 percent of Aarusha’s tenants are female, the company also operates women-only hostels that foster a sense of safety, which is a critical concern for migrants when deciding to make the move to the city.
Founded in 2007, Aarusha plans to expand its operations to five more cities over the next two to three years in an effort to impact nearly 90,000 migrant customers. Acumen will join Elevar Equity as an investor in the company.
“Stand-alone hostels and ‘paying guest’ accommodation are scattered across cities with no accountability around quality and safety,” said V. Satyanarayana, co-founder and CEO of Aarusha Homes. “Aarusha is trying to build a national brand synonymous with affordable, comfortable and safe housing. We are thrilled to partner with Acumen as we look to scale operations and accelerate our impact on the migrant poor.”
To learn more about Acumen’s investments in India, visit www.localhost/regions/india/