Startups have spent the last decade trying to offer every variant of Airbnb they can imagine. But Ukio believes he has found a way to overcome the ever-growing tangle of rental housing competitors – and regulators – just as remote working is becoming the norm.
It offers rentals of one month or more, offering a premium turnkey experience in prime locations in town in partnership with local owners. The first results are promising.
The Barcelona, Spain-based company was founded early last year and today has over 100 apartments between that city and Madrid while maintaining an occupancy rate of 95%.
Today it announces a large funding round of $ 9 million from major European investors, with plans to expand to more than 700 apartments in six mainland capitals by 2022. Lisbon is the next city on the line. list, followed by London and Berlin.
So far, Ukio’s guests have been split almost evenly between two use cases, according to co-founder and CEO Stanley Fourteau *. Half are new long-time residents who have landed local jobs and will eventually move into permanent accommodation. So far, this group tends to stay six months or more.
Longtime director of Airbnb, Fourteau says the integration of remote and distributed working has also attracted a growing group of types of digital nomads who are looking for something more than a short-term rental. This half of the user base tends to stick around for about two or three months, to this day.
Image credits: Ukio
To indicate this market opportunity, he cited the Gartner report showing that the demographics of remote workers could reach 31% of all workers by the end of this year. But TechCrunch readers might find that figure a bit conservative. Proptech investors I interviewed for Extra Crunch in March, for example, described office space as more of a luxury in the future, with more workers living where they wanted – places with “third parties.” “fun” spaces for entertainment and community, like what many European cities are known for.
Ukio, which means “live in the moment” in Japanese, is not the only startup targeting this demographic shift. Among a long list of these are Blueground, Sonder, Sentinel, and Zeus (plus long-term rental options from Airbnb). So what’s different here?
“Ukio rents, furnishes and manages properties to oversee the entire customer experience,” explains Fourteau. “Our vertically integrated approach allows us to professionalize the offering for platforms such as Airbnb (a peer-to-peer market), in the same way that global hotel chains professionalize the offering for Booking.com.
The idea arose from his time at Airbnb, where user demand for long-term rentals never quite matched the company’s platform model. “The main objective of [that] the company is to strengthen its relations with its host community and develop it, ”he says. If Airbnb were to create a vertically integrated rental operator like Ukio, “it would compete with their existing community and could jeopardize its relationship with them.”
Today, he says, the most desirable long-term rentals in a city are taken before they are posted on Airbnb or are snatched from the platform long before demand is met. Apartments operated by Ukio, on the other hand, “will be a part of this community for many years to come.”
Ukio’s relationship with landowners is another way to create a wedge around key locations, he believes. “We enter into 7 to 10 year lease contracts with full tenant management. These agreements optimize their yields, avoid vacancy rates and reduce management costs. Ukio provides them with guaranteed returns and offers a hassle-free solution. As a company, we now receive more inbound inquiries from owners wanting to work with Ukio than targeted contacts, with a strong supply pipeline for growth over the next year.
Image credits: Ukio
Here’s a more detailed look at what it sees providing long-term differentiation, paraphrased for brevity: Ukio uses a 200-point process to select potential apartments and only works with owners of the best in locations. of choice. Many of them are individual units, which allows for a greater spread within a city than startups like Sentral that use entire buildings. Each unit also benefits from a unique design, compared to the model-based approach of Blueground and a few others. While many competitors are primarily platforms with hosts providing and managing their own units, Ukio has an in-house team to manage all properties. It is also starting to focus on Europe, with many of its more direct competitors like Zeus focusing on the United States.
On the technical side, in addition to the procurement acquisition tool, it uses a dynamic pricing model to help maintain a high occupancy rate, as well as an in-house design system and catalog to reduce costs. installation and integration. Ukio’s co-founder, Stanley’s brother Jeremy, has a decade of experience in key roles at Zynga, EA, Headspace and most recently Knotel.
As a company with a physical primary product, Ukio faces risks of tightening local regulations as well as COVID-related restrictions. Fourteau (Stanley) acknowledged the problems but argued that Ukio’s particular model is better suited to deal with them as it is used extensively by locals in the long run. The bigger question in this phase seems to be Ukio’s various well-funded competitors, who will undoubtedly modify their models over and over to attract the remote workers of the future.
And so, this need for rapid scaling is the context for the large seed cycle. It was run by French venture capital firm Breega with participation from Heartcore and Partech, and angels like Iñaki Berenguer, founder of Coverwallet, and Avi Meir, founder of Travelperk.
* Disclosure: I went to college with Stan almost 20 years ago, but we had lost sight of each other ten years before he sent me this news.