Post-COVID Short Term Rentals
Plus 2 Financings, 2 Pieces of Interesting News, and 8 Worthwhile Reads
If you have an hour, I highly recommend listening to Kara Swisher’s interview with AirBnB CEO Brian Chesky from about a month ago. It’s a great insight into how they have handled and streamlined their core business in the pandemic-riddled economy.
After listening a few weeks ago, one thing became clear to me:
AirBnB is going to be just fine.
In fact, they are probably going to be better than fine. I already mentioned how I expect them to IPO soon.
They are well-financed, pure technology, and have unlocked a once-in-a-generation supply-and-demand problem for unused residential rooms.
But what happens to those of us down stream or in adjacent markets?
What happens to the Sonder and Daydream and Lyric and Niido and Vacasa and StayAlfred that depend on travel and AirBnB as a distribution channel to make their model work?
My theory is, like most other parts of PropTech, consolidation not eradication.
All of those companies were growing and thriving 6 months ago. Half the companies I mentioned above no longer exist in any meaningful way.
What seems to be happening is exactly what happened in coworking. Master leases falter and management companies survive. WeWork tried to master lease space and make profit on the sublease arbitrage. Industrious just signed management contracts to manage coworking space for landlords.
Many of the companies that have been failing in STR attempted to master lease apartments and then make their profit on the nightly-rental arbitrage.
That master lease model doesn’t seem to be panning out because they can’t pay those leases when no one is traveling. To be clear, I’m not necessarily criticizing those companies that chose the master lease model. After all, who could have foreseen a once-in-a-century pandemic grinding global travel to effectively zero?
Still, I think the thoughtful investor/founder takes note of that structure and its limitations.
Once travel resumes, all of these companies that have survived will be fine. (Ask Dr. Malcolm.) And kudos to them.
But be sure and take the lesson here about models/structure. And think about the trade-off you are making in terms of speed/scale with the management model.
Food for thought.
On to this week’s deals and data:
Financings:
Zolostays, an Indian coliving startup, raised a $56M Series C from Invest Corp, Nexus VP, and others.
Notarize, a Boston-based digital notary platform, raised a $35M Series C round led by Camber Creek.
News:
WiredScore is creating a certification for smart buildings.
I’m still waiting for the first super surprising retailer bankruptcy post-pandemic. Everything so far (Pier 1, J Crew, etc) has been pretty obvious. RIP, Sur la Table.
Funds:
Paid Subscibers Only.
Read:
Check out this great piece in Forbes about Tenant Experience by the CEO of Rise Buildings.
You should read everything Dror Poleg writes. Here is his most recent article (which is a series of essays).
Check out my friend Joe Aamidor’s piece in Propmodo about the case for a Smart Building Stimulus.
MFE talks about how Smart Apartment Tech is a must for Gen Z.
It’s not really a new concept, but Bloomberg explains that the future of malls might be apartments.
I’m curious to learn how Juno is different than Katerra, Rad Urban, and the other pioneers in the space.
Hospitality Tech discusses how COVID 19 has changed restroom design/layout.
Bloomberg outlines an MIT study that implies cities are no longer “Elevators of Opportunity”.
Thanks for reading!
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