There is growing evidence that low oxygen conditions are beneficial for in vitro stem cell culturing. Mimicking the physiological oxygen tension of the placental stem cell niche in cell expansion can -ultimately result in more robust cell expansion. Growing evidence also suggests that hypoxic preconditioning of cells may improve therapeutic outcomes. Here we describe a scalable method that enables mesenchymal stromal cell expansion from virtually every cord blood unit, including those that would normally be disqualified from banking. In addition, the cells obtained by the described method fulfill exclusively the mesenchymal stromal cell characteristics defined by the International Society for Cellular Therapy.