Blueground accelerates its LatAm expansion with the acquisition of Tabas
United States/Latin America: Furnished apartment rental company Blueground have reached an agreement to acquire the Brazilian proptech start-ups Tabas, marking the first acquisition in nearly a decade of history.
Blueground will soon buy the startup, ten months after leading Tabas’ $14 million in Series A funding earlier this year. Tabas is the largest operator of designer quality furnished apartments for 30 days or more in São Paulo, Rio de Janeiro and Brasilia.
The acquisition, which is expected to close in early Q1 2023, will allow Blueground to enter the Latin American market and fuel the increased demand for flexible furnished rentals in the region. Together, Blueground and Tabas will launch in Mexico City in early 2023.
During the period leading up to the closing of the transaction, the two companies will continue to operate independently and will gradually integrate over the next year. The combined organization will be present in 29 cities in 16 countries and will employ more than 1,000 people.
Based on current financial projections, the joint entity is expected to generate approximately $650 million in 2023.
Considered one of the largest turnkey property rental companies in the 30+ day industry, Blueground has a network of 9,500 move-in ready, expertly designed homes enabling people to live flexible where they want.
The company was co-founded by CEO Alex Chatzieleftheriou in 2013, who, after many years as a business consultant, had experienced firsthand the pain points of living out of hotels for work for months at a time. He aspired to create a seamless way for people to move freely between neighborhoods, cities and countries around the world.
Blueground currently works with over 4,700 landlords worldwide, providing them with rental income, expert property management and large-scale maintenance services. Acquiring Tabas will allow Blueground to grow its network faster, support its goal of reaching 40,000 apartments in 50 cities by 2025, and add more location options for its customer base.
Alex Chatzieleftheriou, co-founder and CEO of Blueground, said: “We have been targeting Latin America for some time, as we see huge market potential for furnished and flexible rentals. Since our first investment in Tabas last year, we have developed immense respect for the Tabas team and what they have built in Brazil.
“With our cutting-edge technology and expertise in scaling the business, we will continue to grow and bring the flexible lifestyle option to more markets globally,” he added.
Last September, Blueground also raised $180 million in Series C fundingincluding $140 million in equity, from investors led by WestCap Group Managing Partner Laurence Tosi, giving the company a reported valuation of $750 million.
Founded in May 2020, Tabas was born out of the founders’ frustration with the lack of flexible, fully furnished rentals for medium to long term stays. Tabas now has over 1,000 apartments in three cities across Brazil – São Paulo, Rio de Janeiro and Brasilia, raising over $20 million in funding prior to the acquisition.
As the first post-acquisition project, Tabas will offer its knowledge and understanding of the market to support Blueground’s launch in Mexico City in early 2023, marking Blueground’s 30th city and 11th in the past 12 months.
Leonardo Morgatto, co-founder and CEO of Tabas, said: “The visions of Tabas and Blueground are perfectly aligned and together we can create even more value for our customers, our owners and the Tabas team. This acquisition is another achievement for Brazilian proptech companies.
“We are proud of the work we have done to get this far. now is the time to take it to the next level and continue to bring the concept of flexible, turnkey rental living across Latin America,” he added.
The pandemic has given rise to new work environments, allowing people to explore the world and forgo traditional long-term leases for flexible rentals. To meet growing demand, Blueground says it has doubled its supply of apartments over the past year.
The acquisition is subject to standard closing conditions, including regulatory approvals.