Life House, a community-centered boutique hotel company, announced today that it has closed $40 million in funding so far to develop its lifestyle hotel brand. It will launch its booking platform mid-summer.
The $10 million in venture funding consists of a Seed round in September 2017 led by Comcast Ventures and a Series A round in February 2018 led by Global Founders Capital. The remaining $30 million in private equity was provided by Henley Investment, a real estate investment group.
Life House was founded in 2017 by Rami Zeidan, a hotel and real estate executive, and Yury Yakubchyk. Crunchbase News has spoken with similar companies looking to transform the Airbnb experience, including Spokane-based Stay Alfred which has taken its luxury rental business to 22 cities across the U.S. But Life House is attempting to put an interesting spin on the travel and hotel industry with its experience-centric boutique hotel business. Life House aims to combine the social and community aspect of staying in a hostel, with the amenities and convenience of staying in a nice hotel.
“We are seeking to cater to customers that desire to spend on a lifestyle experience, rather than an isolated expensive hotel room,” CEO Rami Zeidan told Crunchbase News in an email.
Life House plans to attract travelers by using customer information to match individuals with compatible roommates if they book more than 48 hours prior to arrival. Life House is also launching a social network through its platform that allows individuals to connect with roommates after booking.
“The social network makes it easier to book a trip as an individual, and we are really aspiring to encourage more individual travel and provide an efficient alternative to the potentially unsafe, unclean, and remote home sharing products,” Zeidan expressed.
In addition to incentivizing referrals with free trips and drinks, the company plans to leverage data to acquire customers.
“Sophisticated customer acquisition primarily involves using data and technology to acquire customers, which requires really technical ROI analysis that doesn’t exist in the lifestyle hotel industry due to a historically complex evolution of technology add-ons in the space,” Zeidan wrote.
Lifehouse plans on keeping prices low by relying on local talent, providing necessary (yet not excessive) amenities, minimizing redundancy in staffing positions, and relying on a meticulous business model.
According to the company, splitting its funding between the venture and real estate capital will allow Life House to use venture funding to be “asset-light and scale without increasing its costs.” Meanwhile, the $30 million will be directed toward the physical development and design of its properties.
“We develop and design our own buildings, leveraging local experts where applicable. This alleviates work required by the real estate capital and allows us to control the experience that we eventually operate.” Zeidan wrote.
Zeidan explained that the company looks for properties that are “ripe for a rebranding or repositioning” through property owners and their existing relationships. He told Crunchbase News that the cost of each building project depends on its size, existing condition, development scope, and current market dynamics.
“To date, the average capitalization of each project has been [around] $10 million, but the company is under contract for a $20 million project to launch later this year,” Zeidan said.
Life House plans to open its first two hotels in Miami in the fall followed by the launch of its Brooklyn New York property in 2019, according to its press release. It also has plans to open in Los Angeles.
Illustration Credit: Li Anne Dias
Editorial Update: A previous version of this article stated that Life House is launching its booking platform– the platform will not be launched until this summer.