You are currently viewing Flexible apartment startups gain more traction, as Landing lands $125M in debt and equity funding – TechCrunch

Flexible apartment startups gain more traction, as Landing lands $125M in debt and equity funding – TechCrunch


Startups looking to make it easier for people to rent apartments on a flexible, shorter-term basis, are gaining momentum thanks in part to the rise of remote work. Last week, Dealbook reported that a flexible living startup, Flow, founded by WeWork co-founder Adam Neumann, has locked down $350 million from Andreessen Horowitz. Earlier today, TC reported that an online rental marketplace, Zumper, just raised $30 million in a Series D1 round of funding led by Kleiner Perkins to help it better serve people looking for short-term rental options.

Now, Landing, a startup that is making it possible for its customers to rent a fully furnished apartment on its platform for as short a period as one month, says it, too, has secured fresh funding: $75 million in equity funding and another $50 million in debt.

Delta-v Capital led the equity piece, joined by new and earlier investors, including Greycroft and Foundry. Landing has now raised $237 million in venture funding and $230 million in debt since its launch in 2019.

We told you a bit about Landing last week in a piece about founder Bill Smith, a serial entrepreneur who we dubbed the “anti Adam Neumann” given that he’s decidedly understated, he’s conservative when it comes to raising venture funding, and his two past companies have only made investors money. (Neumann, in comparison, is a forceful personality, and on WeWork’s path to becoming a publicly traded company last year, not everyone came out ahead.)

The company works like so: using gobs of data on pricing and demand around the country, it zeroes in on multifamily buildings around the U.S. Though performance marketing and referrals, it then finds tenants for these apartments, itself signing one-year leases, then quickly moving in everything from furniture to utensils for the tenant. (Landing has all of these furnishings made in Vietnam and shipped to warehouses in Austin, Phoenix and Alabama, where it is based.

Tenants, who sign on as Landing “members” for a $199 yearly fee, commit to renting from Landing for a minimum of six-months, though they’re allowed to move freely to other Landing-operated apartments during that period, provided they give the company two week’s notice. Smith says that currently, on average, they stay in one spot six months.

Right now, Landing — which is not profitable — makes money by marking up what it pays in rent by upwards of 40%. Eventually, Smith told us last week, Landing intends to sell its software directly to the multifamily property owners. “Over time, we’ll partner with owners to bring this product to their building, and it really won’t be a ‘Landing’ lease product,” he’d daid. “They’ll just join the Landing platform. They’ll operate using our technology and our standards. And, and it won’t be this model of, you know, Landing leases it and is committed to that lease.”

It sounds very much like what Flow is building, based on a “inside” story about Flow in the real estate outlet The Real Deal this week. According to the outlet’s sources, Flow is effectively a service that landlords employ to make their properties more attractive to people who want to bounce around yet also experience a branded, consistent experience.

As with Landing, shorter lease terms and furnished apartments will likely allow Flow to command higher rents, notes The Real Deal.

Unlike Landing, Flow will itself own at least some of the multifamily units into which its members move. Indeed, with his ample WeWork proceeds, Neumann has already snapped up more than 3,000 apartment units in Miami, Fort Lauderdale, Atlanta and Nashville, per Dealbook. It could give the outfit an additional advantage. As the Real Deal notes, Flow’s buildings will “also be able to tap into cheaper financing . . . because banks can lend to the properties at the same leverage point offered to apartment projects, or up to 80 percent. Those are more favorable terms than the roughly 55 percent typically offered to hotel developments, essentially creating a high-yield business with lower costs.”

Flow, Landing, and Zumper aren’t alone in spying opportunity in flexible living. Last fall, Zeus Living, which is focused on giving people “flexible living” options, raised $55 million in a round led by SIG. Blueground, a pre-furnished apartment rental startup focused on short-term and long-term rental, meanwhile raised $180 million in equity and debt funding last September. Another tech-enabled platform, Placemakr, separately raised $90 million from investors back in March.

Another flexible-living company is Sentral, whose 3,000-plus properties are owned by Iconiq Capital, the San Francisco-based investment firm whose investors include Mark Zuckerberg and Reid Hoffman; Iconiq is also a major investor in Sentral, the WSJ reported last year.

Expect more players backed by more capital, despite the uneven performance of some companies in the space, including Sonder, a short-term rental startup that went public last year via a SPAC merger and that last month cut one-fifth of its staff as part of a restructuring designed to shave $85 million in annual expenses. (On the customer-review platform Trustpilot, Sonder receives 1.3 out of five stars, with complaints about everything from a lack of hot water in its branded units to blood-stained linens.)

While the short-term rental business is complicated given its many moving parts, more individuals are adopting a nomadic existence owing to the pandemic’s ripple effects, and VCs like nothing more than an industry in flux.

“Our view,” Placemakr’s CEO tells The Real Deal, is that the “more the merrier. The institutionalization of an asset class doesn’t happen by a single group.”



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