Hot on the heels of the rise in remote working, investors have poured hundreds of millions of dollars into businesses promising to introduce the same kind of flexibility into the home.
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Two US startups last week announced raising a combined $308m to “fix the antiquated apartment rental experience” and “[reinvent] the future of living” with backing from major investors like Softbank.
Unlike co-living, these businesses have focused mainly on lease flexibility rather than on community or shared spaces.
Softbank’s foray into flexible living
New York-based June Homes said it has built an algorithm that detects apartments with “untapped potential” – often in disrepair – and works with the landlord to inspect, upgrade, renovate and list homes quickly.
For tenants, it promises flexibility: they can choose to rent the space furnished or unfurnished, with roommates or alone and choose to stay “for as long as they’d like” (as long as they want to stay between one and 18 months). Pricing, the company said, is more in line with traditional leases than flexible short-term leases.
For landlords, June Homes makes “quick visually impressive upgrades” – the startup said the process from inspection to listing takes less than 72 hours – eliminates broker and management fees and takes responsibility for filling spaces 10 times faster than traditional systems.
The company said it reduces the risk of being an owner by taking the responsibility for tenant defaults, non-payments and overall building performance.
As with many proptech platforms, there is also a real-time owner dashboard to give users analytics and insights into metrics such as rent collection.
June Homes last week said it had raised $50m in funding so far through funding rounds led by SoftBank, known for its role as a major WeWork shareholder and for fuelling the flexible office operator’s rapid growth in the lead up to its failed IPO in 2019.
Sherman Li, partner at SoftBank Ventures Asia and a board member of June Homes, said: “Innovation in the rental market is long overdue, and we believe that June Homes’ modern approach will solve major pain points for both tenants and landlords.”
Operating in New York, Washington DC, San Francisco, Los Angeles, Philadelphia and Boston, June Homes said the number of tenants has grown 2.5 times, quarter on quarter, and has experienced more than 25 times fewer tenant defaults than the industry average due to its flexible leases.
Flexible living for digital nomads
Days earlier, Blueground announced that it had raised $180m in Series C funding, taking its total raised to $258m.
The startup offers flexible accommodation in more than 5,000 apartments in 15 cities globally, arguing that it is “reinventing the future of living” with homes for people “where they want, when they want, on the terms they want”.
Leaning into the growth of remote working, Blueground said there is a need to meet demand from “digital nomads” for flexible, long-term accommodation.
Users can choose to rent for a month, a year or longer in apartments that are fully stocked, furnished and operated by the startup. Although there are discounts for staying long-term, the company’s website stresses flexibility, imagining that tenants could move between neighbourhoods or cities, exploring different areas as they work remotely.
Meanwhile, Blueground pays landlords guaranteed monthly rent, taking on the risk of vacancies and the responsibility for tenant management with its guest app.
Alex Chatzieleftheriou, CEO and co-founder of Blueground, said: “With the new living and working paradigm, we are ideally positioned to meet people’s increasing demands for greater flexibility.
“We’re incredibly excited about the vast growth potential, which will be accelerated by this latest round of funding.”