Short-term rental startup Kasa Living raises $ 30 million to create a more formal Airbnb
Kasa Living, a startup that offers short-term rentals in hotels and multi-family properties, has raised $ 30 million in Series B funding to improve its software and streamline operations, the company said. The fundraiser comes on top of a previously unannounced $ 20 million Series A that it closed last year.
“What Kasa customers see is just the tip of the iceberg. The enormous operational complexity behind the scenes is addressed by Kasa’s technology platform, ”said Nick Shalek, Managing Partner of Ribbit Capital, who led the latest round.
Other investors include RET Ventures, Zigg Capital, FirstMark Capital, Allegion Ventures and BoxGroup.
Kasa was founded in 2016 by Roman Pedan, an alumnus of the KKR real estate group, while a student at Stanford Business School. At the time, he says, Airbnb’s popularity was skyrocketing, but travelers “sometimes had a great experience and sometimes a bad one. … They lacked that element of confidence.
He decided to create short-term rentals that were more standardized, but still cheaper than many hotels, by exploiting vacant units inside hotels and apartments. Today, the typical rental from Kasa costs around $ 130 per night.
Kasa has entered into its first partnership with an apartment building in Santa Clara, whose owner has offered four units as a pilot. They had less than a week to convert the space. “We slept on the floors of the apartments because the beds weren’t built yet,” says Pedan.
The pilot went well and by the end of 2018 Kasa had 100 rooms on its platform in six cities. The company reports that it now has nearly 1,000 rooms in 35 cities, generating 100,000 annual bookings and annualized sales of around $ 30 million. The business is not yet profitable.
During the pandemic, Pedan says the company has actually increased sales by 50% as people seek short-term accommodation outside of city centers. Most of its bookings come from business travelers and families.
As Kasa strives to take an active part in Airbnb’s business, he has a huge market to capture. “[Short-term rentals] now represent a $ 115 billion per year industry, ”CBRE CEO Mark VanStekelenburg said in February report. “As a result, traditional hotel reviews… are no longer appropriate. The report notes that short-term rentals are starting to run into saturation in large urban markets. But Kasa still has plenty of room to grow.