There seems to be no end to the number of startups operating in the travel and accommodation space. These range from online travel agencies, hotel booking sites and aggregators, to companies that help hotels fight back in an attempt to get more direct bookings. And of course there is Airbnb and its ilk.
One growing sector we can add to the travel accommodation list is long term stays for business travelers. Enter Cologne-based Homelike, founded in 2015 by Dustin Figge and Christoph Kasper. The German startup targets business travelers who need “long-stay” accommodation of a month or more and for which a hotel doesn’t really cut it. Citing growing demand from both the supply and demand side, the startup has just raised €4 million in Series A funding led by Cherry Ventures, with participation from existing backer Coparion.
“Due to many international work assignments, Christoph and I used to work and live abroad for several months with stays in China, the U.S, and some European cities. Eventually we were both tired of staying in hotels with limited privacy and without a ‘home away from home’ feeling,” explains Figge, Homelike’s CEO.
“Furnished apartments were more comfortable, flexible and also significantly cheaper than hotel rooms. We both liked it way more than hotels! However, it was anything but easy to find a suitable apartment and book it online from a remote location. That was the point, the idea for Homelike, and thus our business was born”.
As the pair began to scope out the startup’s product, Figge says it became more evident how underserved business travel is within the apartment rental market. At the same time, companies increasingly require employees to relocate temporarily as part of their work for weeks if not months on end.
“Also companies themselves are trying to cut accommodation costs rapidly these days,” he adds. “They spend about 25 per cent of their business travel costs on overnight stays. When it comes to prolonged periods, furnished apartments are, in most cases, a 40 per cent more cost-effective solution in comparison to hotels. Including added benefits of being more comfortable and flexible. Simultaneously, the temporary housing market is growing rapidly by 20 per cent year over year and is becoming much more professional”.
To take advantage — and feed — this trend, Homelike offers an entirely online and “no friction” booking experience for furnished apartments for long stays. This includes a secure booking process, corporate travel policies (such as VAT invoicing), and a user experience it says is designed to cater to the needs of corporates.
Furthermore, Figge says that apartment providers prefer Homelike because they can easily list their entire inventory online. “After the apartments have been verified based on our quality standards, the landlord can relax knowing that we take care of the whole process end-to-end, including the billing and transactional process. We are the only platform which provides a digital rental agreement that is signed by both parties, skipping the traditional process of printing and sending a paper copy back and forth,” he explains.
More broadly — and something that likely attracted Cherry — is that the rental market is generally shifting towards the direction of furnished and serviced living. “Similar to the shifts we are experiencing in transport and mobility, we believe that the rental market will develop towards a ‘living-as-a-service model’,” says Figge.
Finally, I’m told there is another piece to the Homelike play: data. This is seeing the startup generate what it claims to be a significant amount of data around rental prices, the best locations, the best floor plans, etc — data it reckons will enable Homelike to vertically integrate further with developers that are building new and proprietary supply that is tailored to the business travel segment.