As remote work becomes normal, Ukio raises $9 million for premium long-term rentals • TechCrunch

Startups have spent the last decade trying to offer every variation of Airbnb they can imagine. But Ukio thinks he’s found a way to navigate the ever-growing tangle of home rental competitors — and regulators — as remote working becomes the norm.

It offers rentals of a month or more, offering a turnkey, upscale experience in prime city locations in partnership with local landlords. The first results are promising.

The Barcelona, ​​Spain-based company was founded early last year and has more than 100 apartments between that city and Madrid while maintaining a 95% occupancy rate.

Today it announces a major $9 million seed round from top European investors, with plans to expand to more than 700 apartments in six continental capitals in 2022. Lisbon is the next city on the list, followed from London and Berlin.

So far, Ukio guests have been split almost evenly between two use cases, according to co-founder and CEO Stanley Fourteau*. Half are new long-term residents who have landed local jobs and will eventually move into permanent housing. So far, this group tends to stay for six months or more.

A longtime Airbnb director, Fourteau says the integration of remote and distributed work has also attracted a growing group of digital nomad types who are looking for something more than short-term rentals. This half of the user base tends to stick around for about two or three months, to date.

To indicate this market opportunity, he cited Gartner report showing that the remote worker demographic could reach 31% of all workers by the end of this year. But TechCrunch readers might find that number a bit conservative. Proptech investors I interviewed for Extra Crunch in March, for example, described office space as being more of a luxury in the future, with more workers living where they wanted – places with playful “third spaces” for entertainment and community, as many European cities are known for.

Ukio, which means “live in the moment” in Japanese, isn’t the only startup targeting this changing demographic. Blueground, Sonder, Sentinel, and Zeus (as well as Airbnb’s long-term rental options) are some of the biggest. So what’s different here?

“Ukio rents, furnishes and manages properties to oversee the entire guest experience,” says Fourteau. “Our vertically integrated approach allows us to professionalize the offer for platforms such as Airbnb (a peer-to-peer marketplace), in the same way that global hotel chains professionalize the offer for Booking.com.”

The idea grew out of his time at Airbnb, where user demand for long-term rentals never quite matched the company’s platform model. “The main objective of [that] company is to strengthen its relationship with its host community and make it grow,” he says. If Airbnb were to build a vertically integrated rental operator like Ukio, “it would be in competition with their existing community and could jeopardize its relationship with them.”

Today, he says, the most sought-after long-term rentals in a city are taken before they appear on Airbnb or are snatched from the platform long before demand is met. Ukio-operated apartments, on the other hand, “will be part of this community for many years to come”.

Ukio’s relationship with landowners is another way to drive a wedge around key locations, he believes. “We commit to 7 to 10 year leases with full tenant management. These agreements optimize their returns, avoid vacancy rates and reduce management costs. Ukio assures them of guaranteed returns and offers a hassle-free solution. As a business, we are now getting more inbound inquiries from owners wanting to work with Ukio than targeted outreach, with a strong supply pipeline for next year’s growth.

Here’s a more detailed look at what he sees providing long-term differentiation, paraphrased for brevity: Ukio uses a 200-point process to choose potential apartments and only works with landlords of the best in prime locations. choice. Many of them are single units, allowing for more distributed mixing in a city than startups like Sentral that use entire buildings. Each unit also benefits from a unique design, compared to the template-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 also starts out focusing on Europe, whereas many of its more direct competitors, like Zeus, focus on the United States.

On the technical side, in addition to the supply acquisition tool, it uses a dynamic pricing model to help maintain high occupancy, as well as an internal design system and catalog to reduce installation and integration costs. Ukio’s product-centric 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 whose main product is physical, Ukio faces risks from 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 because it’s so used by long-term dwellers. The biggest question in this phase seems to be Ukio’s various well-funded competitors, who will no doubt change their models repeatedly to attract the remote workers of the future.

And so, this need for rapid scaling is the context of the big round. It was led 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 touch ten years ago before he sent me this news.