As Airbnb absorbs more and more of the demand for housing, it explores how opportunities beyond holiday rentals can be paid off. A marketplace for longer-term corporate housing could be a huge business, but instead of building it for itself, Airbnb is making a strategic investment in one of the market leaders, Zeus Living, who will list his homes on the Airbnb website.
Zeus Living has generated $ 100 million in sales in just four years, when landlords' houses were redesigned and rented to resettled workers for a period of 30 days (or more). In 2019, sales increased by 300%. Meanwhile, 250 employees and more than 2,000 apartments are managed. Zeus makes money by charging landlords for a month free of charge and charging the rent charged to customers. It could rent $ 4,000 a month for $ 5,000 and take the extra month to earn $ 1
The CEO and co-founder of Zeus, Kulveer Taggar tells me, "I basically believe that a lot of human potential is tied to the site. At Zeus, we are determined to make life easier for people where they have the opportunity. "It already has 27,000 inhabitants for a total of 650,000 nights.
Strong margins, rapid momentum, and the mega-trend of more mobile workers has brought Zeus Living a new $ 55 million Series B round, announced today at TechCrunch. Financing will be provided by Airbnb, Comcast, CEAS Investments and TI Platform Management, as well as existing investors Alumni Ventures Group, Initialized Capital, NFX and Spike Ventures. The financing amounts to 205 million US dollars after the receipt of the money.
"The possibilities here are huge, consumer spending is moving towards living and everyone has to stay somewhere. But the launch strategy of Kulveer and Zeus is impressive, "said Garry Tan, co-founder and managing partner of Initialized. "Zeus has decided to start leasing businesses. We believe that this is the best time to market since it represents the highest profit margin and that capital efficiency wins in an environment of many competitors. Business requirements are longer term, consistent and predictable, and the partnership with Airbnb strengthens this approach as it expands to provide a platform for each city. "
Zeus previously raised $ 2.5 million in seed capital and then $ 11.5 million in Series A, led by Initialized, and $ 10 million for the acquisition of real estate in the San Francisco Bay Area, Los Angeles, New York, Seattle and DC credit facility to cover the risk of filling apartments with employees of clients such as Brex, Disney, ServiceTitan and Samsara.
Push Button Housing
Rather than move to a boring company building to find or finish a place yourself In expensive long-term airbnbs, workers moving to new cities can go to Zeus. It takes over apartments, takes care of the maintenance and fills them with trademark-protected comfort such as Parachute bedding and helix mattresses, which Zeus receives at mass prices. The start-up expects fewer workers to own furniture and instead look for furnished flats as offered by Zeus when switching jobs and cities more frequently.
Thanks to the premium stays offered, Zeus can charge its customers a lucrative tariff. Taggar claims that its service is still about half the price of a standard one. For property owners, Zeus makes it easy to get a uniform paycheck on rent without the landlord's traditional work being required. Zeus takes care of cleaning and replacing the keys so that the owners do not have to do anything like an Airbnb. The goal is to attract the first tenants within 10 days of taking over a property.
The new funding will help Zeus expand into more neighborhoods and cities while focusing on the breadth of each market, allowing customers to choose from plenty of housing. The startup will revise its corporate booking and billing tools and improve real estate procurement. In the meantime, the company will invest in customer care to maintain the high NPS values of the 1970s. Resettled workers tell their colleagues how beautiful their new job is.
"Finding housing is stressful and time consuming both individuals and employers. As someone who moved four times, I experienced that tension, "says Taggar. " Zeus Living has developed technology to reduce the complexity of housing and make it a service that enables a more mobile world." Apartment for rent in Mumbai. After moving to the US, he built and sold the Auctomatic auction tool, supported by Y Combinator, along with co-founder and future stringer Patrick Collison. While working on the NFC-driven Task Launcher Day Stand, Taggar realized how hard it was to find new corporate housing and rent out their own home reliably. As Uber, Stripe, and other startups grew enormously by simplifying high-money-making processes, he was inspired to do the same with Zeus Living.
The Property Tech Wars
"Modern professionals travel more frequently, stay longer, and search for accommodations that make them feel at home. As more and more companies rely on Airbnb for solutions for extended stays and removals, this segment remains a focus for Airbnb "says David Holyoke, world leader of Airbnb for the work.
"We are working closely with the Airbnb Team to meet the changing needs of business travelers who desire the comforts of home when traveling for longer 30-day stays on business or on business travel a project, "Taggar says. Airbnb can help Zeus increase demand, thanks to all of its incoming traffic, while Zeus Airbnb offers more options for customers looking for a longer stay.
Zeus' biggest threat is that it could be overstretched. misjudging the demand and ultimately paying the rent for two-year leases that it can not meet. And now that more resources are available, the margins are being examined more closely, especially after the WeWork implosion.
Taggar detects these threats. This is a business where we must focus on maximizing the gross profit we make with the least risky investments. At Zeus Living, we are continually improving the way we predict and secure demand. "He also sets up teams in multiple markets to ensure regulatory compliance and longer-term rentals.
However, Property Tech has become a heated space and Zeus faces strong competition There are traditional corporate housing providers, pure marketplaces that do not deal with logistics, and direct competitors like Domio (19459003) and Juggernaut Sonder (19459003), who have collected an incredible 360 million dollars Over time, landowners and real estate investment trusts such as Blackstone could force Zeus, Sonder and others to compete against the highest leasing rates.
At least with Airbnb as an investor, Zeus has won fear no fierce battle with the technology giant for corporate real estate Airbnb could continue to invest to conquer this adjacent market while listing Zeus real estate or possibly one day acquire the startup. For now, Taggar just wants to prove that startups are accountable in the real world, and recognize that taking over people's homes "means a lot of responsibility! Our homes represent hundreds of millions of dollars of assets that we manage, and we take that very seriously. "