DigsConnect: An African Startup Harnessing The Power of Remote Work to Scale Globally
The Org sat down with Alexandra Procter to learn more about DigsConnect, a marketplace for student accommodation, established in South Africa and now scaling globally.
When Alexandria Procter, now the co-founder and CEO at DigsConnect, was faced with the predicament of having to find a place to stay as a student at the University of Cape Town (UCT), she realized that this was not a unique problem for her. She quickly realized that this was a countrywide problem. It was this problem that motivated her to drop out of pursuing her honors degree in Biology in 2018 to focus on building DigsConnect full time. “The gap in the market was essentially my own pain that I was trying to solve," said Procter.
The Org sat down with Procter to learn more about DigsConnect, a marketplace for student accommodation, established in South Africa and now scaling globally.
Going viral on campuses and growing a team
When she started DigsConnect, Procter learned about the limitations students had, in terms of getting access to information about vacant rooms for them to live aside from on-campus accommodation. Students had a unique need in that the majority are just looking for a room and not an entire apartment, which is what the traditional rental market predominantly caters to. “We learned that most students were using Facebook and WhatsApp groups to access information about available rooms. DigsConnect aimed to create a much more seamless user experience between the student and landlord, leveraging technology,” Procter told The Org.
Greg Ramsay Keal, who was part of the Student Representative Council at UCT with Procter, joined DigsConnect as Procter’s co-founder. “Bringing Greg along was probably the best decision that I have made my entire life, because he's actually been incredible. He is extremely organized and hardworking and will take ideas and make them happen,” Procter said.
Once the platform launched, DigsConnect grew exponentially beyond Cape Town to bigger student town cities such as Johannesburg and Pretoria. This was primarily due to word of mouth. This growth was helpful in enabling the company to attract seed investors in 2019, who provided them with $830,000 — which became the largest seed round to be raised by a female founder in South Africa to date.
The business of student accommodation
DigsConnect generates revenue by serving as an intermediary between landlords and students who need to find accommodation within close proximity to their higher education institution. Their customer relationship management platform manages the end-to-end interaction between the student and landlord until a lease is signed between the two parties. Once an agreement is in place, DigsConnect generates a fee from the value of the student’s lease duration. Landlords are not charged a fee to list their rooms or property.
The seed funding helped the DigsConnect team to grow from two to five people, and Procter has been a firm believer in keeping the team lean and hiring slow. Its team is fully remote and distributed across countries such as Thailand, the United Kingdom, Indonesia and South Africa. “I love remote work and what it has to offer. The only downside is the loss of company culture. I feel some things are lost when you take things online, but what we try to do is have regular morning standups. Our Slack channel is very active. We have long Friday meetings that are casual and filled with banter sessions, which is the beauty of having such a small team,” Procter said.
Procter is based half the time in London and half the time in Cape Town to oversee the company's expansion into some of the key markets the company has identified. This also works well with the dual seasonality of the business between the two hemispheres. DigsConnect currently has at least 1.3 million rooms listed on its platform, worldwide. Its primary market remains South Africa, though it has scaled to the United Kingdom, Ireland, Western Europe, Australia, New Zealand, Canada, the U.S. and Singapore. The company made a strategic decision to partner with student.com, the world’s largest student accommodation marketplace that has a reach in key markets and have enjoyed a mutually beneficial relationship that will enable them to scale faster over the long term.
Through its long standing partnership with The Delta, Africa’s largest venture builder and one of the largest in Europe, DigsConnect raised an undisclosed amount, upwards of a couple million dollars, and is one of The Delta’s first investments in its brand new fund. Plugging into a venture builder has been extremely helpful for DigsConnect to get access to skills and expertise; for example, the company has access to a dev-ops engineer on a temporary basis without incurring a liability in its budget if the company only needs the resource for a few hours.
Procter had a valuable perspective on some of the key metrics that tend to measure a startup’s success. “You often hear a lot of people talking about the amount of money they’ve raised and the growth in the sizes of their teams, but for me greater emphasis should be put on things like market traction, conversion rates and enhancing the user’s experience. I think that sometimes headcount is like a vanity metric for a lot of startups,” Procter said.
She really believes that things like raising funding should not be primary indicators of success. Instead, having the right metrics and resources in place to serve the needs of customers should. DigsConnect is steadfast on setting goals for the company and formulating the strategies to reach them by hiring accordingly. “When you look at it that way, you realize that you don’t need a lot of people. You just need to build a high quality team that is small and nimble and has a great rapport,” Procter shared. The company is a couple of months away from profitability, something that Procter believes is a great milestone for a tech-enabled marketplace. Its goal is to be in as many cities as possible, while growing its brand presence in Africa, as the company believes it can have the most impact because providing accommodation from African students looking to study abroad remains an underserved market.
There are hard moments when Procter needs to reflect on why she established the company, and in those moments she tends to read user’s feedback to acknowledge how their platform is impacting lives positively. “What I find rewarding is the potential to do something impactful on the continent, is what motivates me personally and it's great to be on this journey with a remarkable group of people,” Procter said.