Dubai PropTech aims for an experience as ‘smooth’ as ​​silk

It is often said that experience is the best teacher. This couldn’t have been more true for Aahan Bhojani, who is now striving to ensure others don’t have to learn their lessons the hard way.

As a strategy consultant years ago, Mr. Bhojani had to travel extensively to deal with corporate matters. Coupled with his own personal travels, it was during this time that he constantly noticed a gaping hole in the travel experience.

“I realized there was something broken in the long stay travel experiencesaid Mr. Bhojani, founder and managing director of Silkhaus. The National.

“Finding suitable long-term accommodation options on online travel aggregators was like pulling a needle out of a haystack.”

It was a challenge that the Harvard Business School and Yale College graduate decided to take on by creating Silkhaus, along with Ashmin Varma, who is the company’s chief operating officer.

And its name signals the obvious – to convert any tedious experience into one as “smooth as silk”.

But there is a deeper meaning to the name other than the oft-quoted idiom: while silk is a material that is “universal in many regions, each region has a different variant of silk,” says Mr Bhojani.

“That was true for the type of property management model we want to put in place – to bring global standards to this space with the unique local context of each location we find ourselves in.”

Describing itself as a “technology-driven hotel brand”, Dubai-based Silkhaus, whose holding company is located within the Abu Dhabi global market, aims to “enable immersive mobile experiences by offering commercial and vacationers with a home away from home”.

At the same time, Mr Bhojani says short-term rentals are becoming an asset class for property investors globally, and a preferred host experience for various groups of travelers.

“The space is growing, newly emerging and hyper-fragmented. That’s where I saw an opportunity,” he says.

A fragmented market is one where there are many competitors but no one firm has a distinct advantage over the others.

PropTech is the application of technology in the real estate industry, encompassing everything from property management and reservations to construction and analysis, widely accessible using a mobile app.

It can also offer sustainable solutions to optimize operational efficiency, improve shopping center experiences and digitize property development, residential communities and hotel spaces.

The global PropTech market is expected to grow to $86.5 billion in 2032, from $18.2 billion this year, at a compound annual rate of around 17%, according to data from Future Market Insights.

Meanwhile, the short-term rental market has grown exponentially as people increasingly seek more flexible and cost-effective accommodation, particularly with the growing popularity of ‘staycations’, thanks in large part to Airbnb, which popularized the online marketplace for short-term stays.

The growing trend of global nomads, or professionals who work from anywhere, has also increased the demand for such properties.

The global short-term vacation rental market is expected to grow to over $256 billion by 2030, from around $100 billion in 2021, at a compound annual growth rate of 11.1%, according to Grand View Research. .

However, venture capital investment in PropTech companies has fallen 38% to $19.8 billion this year, from a record $32 billion in 2021, making 2022 the second highest year of investment. low since 2018, according to data from the New York-based company. Real Estate Technology and Innovation Center.

The macro real estate environment is dictating the PropTech industry narrative, and real estate companies have become more cautious as they carefully navigate an economic landscape that has been hit by high interest rates, Market volatility and recession worriesindicates the center.

Deal volume has declined, with late-stage deals dropping significantly due to a lack of mega-towers, or those worth $100 million and above, it says.

Despite these concerns in the global market, Silkhaus was able to raise $7.75 million in a seed round last month which it says makes it “well positioned” to implement its business strategy and expand. medium-term expansion, as well as help boost its portfolio of investors, says Mr. Bhojani.

“In addition to investors buying real estate, we have seen growing interest from the resident population seeking to reside in the UAE. The need for a ‘landing pad’ to accommodate the incoming public has never been greater” , did he declare. The National at the time.

There has been a blurring of the lines between short, medium and long-term travel, alongside that in the business and leisure travel segment, Mr Bhojani said.

Travelers are increasingly interested in short-term rentals, instead focusing on alternative accommodation with an immersive experience at the top of the list.

This, in turn, is a boon for accommodation providers, who have become increasingly competitive to attract customers and deliver the experience they look forward to, along with the convenience travelers may need. .

“I understood how important an asset class can be for landlords if they take their residential real estate and activate commercial-like returns. We did this through technology,” says Bhojani.

Light bulb moments

Two lightbulb moments illuminated Mr. Bhojani’s quest to enter the PropTech sector. The first was when he joined a travel tech startup in Boston to lead its product team, building software to help small and medium-sized businesses book and manage travel experiences and spend. .

“That’s when I started seeing companies of all sizes start booking alternative accommodation formats like short-term rentals, rather than hotels,” he says.

The second happened in Dubai, but just as the Covid-19 pandemic hit the world in March 2020.

What was supposed to be a vacation turned into a months-long stay, leaving a long-term lease he signed in Boston that he couldn’t get out of because the borders were locked down.

This ultimately led to the decision to move to the emirate.

“I felt that residential real estate [in Boston] had failed me as a modern consumer. My lifestyle was such that I split the year between several places,” he says.

This rather unpleasant experience was a blessing in disguise: his arrival in Dubai created more opportunities for him, including the creation of a network of K12 schools in the United Arab Emirates.

And his “solid understanding of how to launch and grow operational businesses in emerging markets” is one of the key factors that has guided Silkhaus.

The business has grown more than 10-fold in the last 12 months, both in terms of scale and revenue, says Mr. Bhojani.

Although the startup does not disclose revenue and customer figures, it is “actively working with some of the world’s largest companies on global relocation and ‘life as a service’ for businesses.”

Plans are also underway to expand into cities in the GCC, South Asia and Southeast Asia.

“We are well capitalized with our funding round to grow and have brought together the strongest financial partners in the world to scale [up] our platform,” he says.

“As consumer experiences have been enhanced, smoothed and accelerated through the use of data and technology, real estate industry players – whether they be landlords, tenants, landlords, brokers or of financiers – have recognized the value of technology in improving the customer experience.”

Q&A with Aahan Bhojani, co-founder and CEO of Silkhaus

If you weren’t in PropTech, what industry would you be in?

I love newly emerged, hyper-fragmented industries that have yet to experience the true impact of technology. As a generalist, there are many great industries to build amazing businesses.

What is the biggest challenge you have faced and the feat you have achieved?

The beginning of building a new business, when you play all the roles. I ran technology, sales, finance, human resources, purchasing and all functions. While it was the biggest challenge, it was also the most enjoyable time – and the only time you have 360 ​​degree visibility into all aspects of a business.

What do you do in your free time?

I love to travel and as an avid foodie I often plan my trips around the cuisines and restaurants I can discover. In my free time, I like tennis very much.

What were your start-up’s growing pains and what advice can you give budding entrepreneurs?

Getting started – identifying a problem and understanding if you can commit over the next decade to solving that problem – is the hardest part of getting started. My advice would be to really spend some time thinking about whether the problem you’re facing is what you want to spend the next decade on. Fit with the founder’s market and fit with the founder’s idea are the most important drivers of the passion to build a disruptive business.

If you weren’t in PropTech, what industry would you have been in?

I love newly emerged, hyper-fragmented industries that have yet to experience the true impact of technology. As a generalist, there are many great industries to build amazing businesses.

Updated: January 02, 2023, 04:00