In 2016, when Davidson Okafor gained admission into the Nnamdi Azikiwe University, Awka, southeast Nigeria, he learned that the university’s on-campus hostels couldn’t accommodate all admitted students; rooms were already overcrowded, and the overall living conditions in and around them were bad—dirty rooms, broken windows, and nasty bathrooms. Like many students, he decided to find accommodation off-campus, a search that would turn out arduous. For starters, he had to shuttle between his home Lagos and Awka, an unfamiliar environment, in his hunt for a hostel room. One time, when he found a hostel room he wanted and was about to pay the rent, he discovered the agent he was liaising with was an imposter. Another time, after he had reached an agreement with the hostel manager about payment and returned to Lagos to pick up his things, the hostel manager gave the room to another tenant who had sooner than Okafor could.
Although, as a first-year student, Okafor had a month before lectures started, the one-month search for accommodation made him miss important orientation sessions for new students.
When Okafor realised his unpleasant experience was shared by many other students, he started thinking of creating a solution that would make it easier for students to secure accommodation off-campus.
During a nationwide university lecturers’ strike in 2016, he enrolled at a computer training institute to improve his coding skills, and it was there he met Folaranmi Olujobi, who was lead tutor at the institute, and who would later join him, as Chief Technology Officer (CTO), to co-found Hostel.ng, an off-campus accommodation solution for students.
Okafor started building Hostel.ng in 2019, with help from his co-founders, Olujobi and Tobi Otomewo, a frontend developer. Hostel.ng’s website allows students to explore the available hostels in their area of choice and inspect them while the Hostel.ng team confirms the availability of the rooms and schedules an appointment with an agent on behalf of the student.
From the Nnamdi Azikiwe University campus, where the startup has its only operations, Hostel.ng currently has 150 hostels housing about 2,000 rooms on its platform and has connected about 500 students to their dream hostels.
Accommodating revenue
In search of revenue, Hostel.ng has made several iterations over the years. In 2019, after building a minimum viable product (MVP), Okafor discovered that while a lot of students were coming to their website to check out their listings, they were not paying for the listed hostels via Hostel.ng’s payment portal, even though there was a button for them to do so. Instead, after these students found their choice hostel on the website, they proceed to pay directly to the hostel’s manager, as they didn’t feel comfortable paying to a random website they’d found on the internet.
Hostel.ng’s search for a revenue model got successful in 2021 after it made money earning a 20% service fee during the beta testing phase on its short-stay leasing feature. The short-stay leasing feature allows students to rent out their hostels to other students who are on a short visit. This will put money in the pockets of students, especially in the light of the ongoing universities strike, which began on February 14, 2022, and has left in its wake empty hostels already paid for.
Later this year, Okafor said, Hostel.ng will launch a rent financing feature that would allow students to pay for hostel accommodation in instalments, spread over 6 months. By partnering with Kwaba, a rent financing startup, to ensure verification of lenders, and disbursement and collection of the credit, Hostel.ng will be making this technology available to hostel managers across the country who wish to allow their tenants pay in instalments. Okafor recalls that while he was still in the university, it was not an easy task for his parents, at the beginning of each school year, to pay his rent and that of his 2 brothers, all at once. He said that it would have been more convenient if they had to foot that bill in instalments.
In 2020, Hostel.ng joined the Lagos Innovate Idea Hub Programme, a 20-week incubator for early-stage tech businesses, organised by the Lagos State Employment Trust Fund (LSETF), which gave them much-needed exposure to the tech ecosystem. Hostel.ng also went through the TVC Labs accelerator in 2021 and, after a successful outing, landed long-time startup investor, Tomi Davies, on its advisory board. Davies mentors the team and assists with refining their ideas.
Last year, Hostel.ng introduced its short-stay lease on WhatsApp by manually pairing students who wanted to lease their hostels with those in need of accommodation. It was able to successfully facilitate some bookings and get about 30 students who were ready to sublease their rooms for up to ₦3,000 per day. During a concert that took place at the Nnamdi Azikwe University, students from different other universities came to visit, and this led to a spike in requests for Hostel.ng’s short-stay lease feature. The founders couldn’t meet up with over-40 requests it got, so they built out a feature that would automate the process.
Okafor attributed the website’s growth to organic bookings from its SEO-friendly name, as they don’t have a marketing budget. He believes the launch of the short-stay lease and rent financing features will make Hostel.ng profitable. He also intends to close a pre-seed funding round for Hostel.ng before the successful launch of these features. For now, Hostel.ng is currently building a wait list for its sub-leasing and rent-financing features.
