Homesharing platforms Sonder and Homelike have both announced successful funding rounds.
The investments will mean further expansion and greater choice in the sharing economy, as it targets the business traveller and those looking for greater curation.
Sonder has agreed a USD85m funding round, led by Greenoaks Capital, taking the total raised so far to USD135m. Unlike a classic sharing platform, the company owns or leases the sites itself and has 2,220 units or 3,300 available.
In a blog post, Francis Davidson, CEO & co-founder, said: “A trillion dollars is spent on accommodations every year, and it is, in fact, the fastest growing sector of the global economy, with USD50bn of demand added yearly. And yet the dominant hotel brands are sleeping at the wheel.
“The industry has done little to innovate throughout the years. Accommodations remain far too expensive and manage to stay this way despite also being sterile and inauthentic by design - think beige stucco boxes stuck in downtown strips or near the airport, replete with chain restaurants and corporate colour schemes. I predict that the next generation of travellers will find it hard to believe that hotels were once so disappointing and lifeless and unaffordable.
“Accommodations are divided between marketplaces and hotel brands. The hotel brands build new hotel supply and focus on providing a consistent experience. The marketplaces aggregate that supply and make it easy for travellers to browse through options, read reviews and book a stay. Yet for alternatives to hotels, only the marketplace side existed and no one was building large amounts of new alternative supply and offering a consistent, high quality, above-board experience. We set out to build that missing piece of the ecosystem.”
The company said that it would use the funding to opening locations in all major cities across the US and Canada, and to look.
Cologne-based start-up Homelike, the B2B booking platform for furnished long-term housing, announced a Series A financing round of Eur4m, led by Cherry Ventures with participation by Coparion as existing investor.
Homelike connects professional landlords with corporate clients, business travellers and private individuals who are looking for furnished and serviced apartments.
“As consumers are more and more looking for alternatives to hotel accommodation on business stays that last longer than 1 month, we strongly believe in this massive market segment with a volume in the high double digit billions in Europe alone and with the number of furnished apartments growing over 20% year over year”, says Christian Meermann, Founding Partner of Cherry Ventures.
Founded in 2014 by Dustin Figge and Christoph Kasper, Homelike has so far acquired more than 10,000 corporate customers, including Jungheinrich, Siemens and Adesso, with more than 400,000 nights booked. Homelike also handles the payment, the electronic signature of online rental agreements and offers a premium insurance to it users in cooperation with AXA.
“We recognised that business customers are a largely underserved segment in the rental market, which is generally shifting into the direction of furnished and serviced living. Similar to the shift we are experiencing in transport and mobility, we believe that the rental market will develop towards a ‘living-as-a-service model’. This is exactly what we are addressing with Homelike,” said Figge.
The company operates in 100 cities and offers 30,000 furnished apartments across Germany, Austria and Switzerland and London and said that it worked only with professional landlords, who offered larger portfolios of apartments – with no room sharing.
Figge added: “With Homelike we are building a platform, where business travellers find their ‘home away from home’ while being on a longer business trip. Thereby, quality of the apartment portfolio, product and user experience is always key to us. In the past we’ve shown the benefits of Homelike to landlords and corporates and this financing round will allow us to bring Homelike to further markets and strengthen our existing operations.”
HA Perspective [by Katherine Doggrell]: Airbnb has done a lot to familiarise the travelling public with the ways of sharing – it is one of the few brands, other than Smirnoff, which can make you feel confident about entering a stranger’s home. Airbnb has also done much of the legwork in taking the flak from local bodies working out how to deal with the repurposing of residential room stock.
But it’s not all a case of ducking in under Airbnb’s cover. Sonder’s Davidson said: “While it’s become standard procedure for startups to bypass regulators in the name of disruption, Sonder has taken a different approach. We forge relationships with cities, ensure local rules are always respected – decrepit office buildings, blighted property, underutilised industrial buildings, and brand new constructions are currently being developed into fully licensed Sonders across the world.” This includes the company taking on the role of property manager, extended-stay renter or gaining a hotel licence.
Imitators were bound to appear – and have been snaffled up by those OTAs and hotel operators which have realised their worth. Nuances have formed, specialising in luxury, business, curation, as you would expect from a sector which takes its cue, ultimately, from the hotel sector. But what the hotel sector has found, and other sharing brands are likely to, is that size matters.