A 26-Year-Old Tech Founder Aims To Cash In On Inefficiencies In Student Housing
On the surface, all might seem well in the UK purpose-built student accommodation universe. Rents across the sector were up almost 10% in the year to September 2023, benefiting from inflation and demand outstripping supply.
But a look beneath the surface suggests there could be problems lurking: Students dropping out of courses has hit an all-time high, and financial hardship is a major cause. Teams tasked with helping students at cash-strapped universities are facing major staff cuts. And the process of finding housing for students remains opaque and hard to navigate.
Against that backdrop of inefficiencies, pitfalls and potential, one 26-year old proptech founder has built a business that late last year completed the largest seed funding round in the history of the UK student sector.
That business is now looking to expand its reach.
“The university ecosystem is suffering,” Hybr founder and CEO Hannah Chappatte told Bisnow. “We’ve created a platform that helps students, landlords and universities in an area which is valuable to the UK economy but which has been inefficient and doesn’t put students and renters first.”
Chappatte set up Hybr in 2019 after what she described as the “toxic” experience of trying to find accommodation while at the University of Bristol and hearing myriad similar tales from fellow students.
The company provides a listings service for student accommodation or accommodation for young graduates, encompassing more than 120,000 rooms from institutional and private landlords across 10 cities. London, Bristol, Manchester and Liverpool are among the cities on its platform.
For landlords, the service provides a dedicated listings portal as well as verifying potential tenants and managing relationships with them throughout the year. Hybr is free to tenants, while landlords pay a fee on the completion of a letting.
Increasingly, the company is also working with universities directly, helping them to connect students with accommodation providers, particularly when students have been unable to secure places in university residence halls. It is working with such universities as the London School of Economics, Imperial College London and the University of Bristol.
Hybr has domestic and international students using its platform, but it can be particularly useful for overseas students, Chappatte said. Those students may not have any experience negotiating the UK rental market, and it might be harder for landlords to verify those students have a place at a UK university and the funds to pay for accommodation.
Chappatte said the business is looking to help all parts of the student world in an economic environment that is seeing parties being squeezed from different angles.
Last year, the most university students in UK history dropped out. Some 40,000 students left their courses, according to data from the Student Loans Company. Mental health was the most commonly cited reason among students, followed by financial hardship. With the UK's higher education industry bringing in £46B annually, that has a knock-on effect for universities, the economy and accommodation providers that are losing tenants.
“There is a financial squeeze on students — rents have increased, but student loans haven’t,” Chappatte said. “Plus, there is inconsistent policy noises coming from the government about restricting the numbers of overseas students, and universities rely on those students financially.”
The company last year raised £3.2M of investment in a seed round from investors that included venture capital firms BlackWood Investors and Adjuvo, as well as individuals including former Office Group CEOs Charlie Green and Olly Olsen, as well as Evelyn Bourke, former CEO of Bupa, the private healthcare giant.
That was more than twice as much as the company was looking to raise. It followed a £1M pre-seed round in 2022.
“We are excited to be leading Hybr’s seed round, as they disrupt the market for first-time renters,” BlackWood Investment Committee Member Abbas Kazmi said. “Their platform provides a much-needed solution for all participants in the ecosystem, from first-time renters to agents, operators and landlords, and we have been hugely impressed by their progress so far.”
The funding will be used to expand into another 10 cities, which will take the number in which Hybr operates to 20 by the end of the year.
In one innovative project, Hybr has teamed up with senior living provider Birchgrove to lease 16 units at the latter’s Ayrton House scheme in Mill Hill, north London, as part of a pilot to promote intergenerational living. The third and fourth floors of the scheme will be leased to trainee doctors and nurses from the local hospital, university post-graduates and graduate school students.
At the end of the tenancies in June next year, the 16 student units will be restored to first-use state before being let to more typical senior living tenants.
“Traditionally, intergenerational living took the form of generations of the same family residing together in a single household,” Birchgrove CEO Honor Barratt said in a statement. “Today, we are pioneering a new model: one that brings different generations together within the same purpose-built housing development. It’s a unique approach, one that we’re hugely excited about, and that we believe will really benefit both young and elderly residents alike.”
“Honor and I saw an opportunity to address the two loneliest subsections of societies, the under-25s and the over-70s,” Chappatte added. “We’re tackling the housing crisis for students while finding a solution to the severe loneliness amongst seniors.
“The seniors support the younger people by making them feel like they have a purpose and familial presence, and seniors get to be around the young to create a more upbeat environment. It’s not for everyone, but it's a real win-win for those that buy into the concept.”
