New York-based Blueground, a tech-equipped apartment rental company, announced today it has raised $50 million in a Series B round co-led by WestCap and Prime Ventures. The financing comes less than eight months after the company raised its $20 million Series A (which we reported on here), bringing its total raised to $78 million.
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Founded in Europe in 2013, Blueground formally launched in the U.S. in the summer of 2018. The company has a unique strategy. It leases apartments and then upgrades, and fully furnishes them, making them available for renters looking for “turnkey” rentals. Blueground typically leases apartments before they hit the market, with a goal of holding them for many years. The startup, which has partnered with more than 2,000 landlords, leases those apartments to “vetted” renters for time periods ranging from 30 days to a year, or longer.
It caters to business travelers and remote workers primarily. In addition to offering WiFi, blueground equips its rentals with smart TVs, “high-end gadgets” and guest support through a Blueground app.
CEO and co-founder Alex Chatzieleftheriou said he founded the company after having spent five years traveling from city to city as a consultant, living almost exclusively in hotel rooms.
“As you can imagine, being confined to such a small space gets old fairly quickly, not to mention the amount of money my employer at the time was spending on accommodations, an amount that exceeded $10,000 per month in some cases,” he told Crunchbase News. “However, alternative options were limited and hardly made sense for my situation. It was impossible to find an apartment to lease for less than a year, and even if you could, you’d have to furnish the place or compromise with the few available, typically unattractive furnished options.”
The experience sparked the Blueground concept, which Chatzieleftheriou said offers users an option that is about 30 to 50 percent less expensive than hotels, with about “three times the space.” The app also offers a relocation function that allows renters “to experience new apartments in different neighborhoods and cities on demand.”
To date, the company has built a portfolio of more than 2,800 apartments in nine cities around the world, including NYC, San Francisco, Los Angeles, Boston, Washington, D.C., Chicago, Dubai, Istanbul and Athens, Greece. Blueground said its revenue grew 200 percent year-over-year in 2018 (although we don’t know the base from which it grew), a metric Chatzieleftheriou expects to meet again in 2019.
He also said Blueground has “surpassed more than one million nights spent by over 10,000 guests” in its rentals. The company currently has more than 400 employees, up from 280 at the time of its last raise in March, and from 200 a year ago.
Blueground also plans to keep hiring with the goal of doubling its headcount over the next 12 months as it adds new markets and grows its staff in existing markets. In particular, it’s looking to hire engineers and data scientists, Chatzieleftheriou said.
“Our guests are typically relocating into a new city as part of a work-related or other move,” Chatzieleftheriou said. “The idea of one’s home being a fixed, long-term commitment is changing as more people are choosing to live in multiple cities.”
Blueground plans to use its new capital in part to further expand its presence in both the United States and Europe. Specifically, by year’s end, Blueground plans to begin offering rentals in London, Paris and Seattle. Its goal is to be in over 50 “business and tech hubs” by 2023. The company also plans to use the money toward technology development, product design and “guest experience.”
WestCap Partner Charlie Young will be joining Blueground’s board as part of the new financing.
In general, the real estate tech space is heating up. In July, we covered Fifth Wall Ventures’ raising $503 million for its second fund to invest almost exclusively in real estate tech companies. And just last month, we reported on Divvy Homes’ $43 million Series B round it raised to help in its mission to help more Americans “move from renters to [home]owners.”
Blog Roll Illustration: Li-Anne Dias