Blueground, a proptech (property technology) company in the pre-furnished apartment rental space, recently raised $180 million in a Series C funding round led by WestCap. Geolo Capital, VentureFriends, and Prime Ventures also participated. Of the money raised, $40 million was in debt financing from Silicon Valley Bank.
Since its 2013 founding, Blueground has raised $258 million and manages over 5,000 apartments all over the world. "We're incredibly excited about the vast growth potential, which will be accelerated by this latest funding round," said Alex Chatzieleftheriou, CEO of Blueground.
What Blueground does for renters
Blueground offers move-in ready, furnished apartments for digital nomads, people who want to stay in centrally based neighborhoods in major cities for a month, a year, or longer -- often without signing a lease.
This setup appeals largely to millennials and Gen Z who can work remotely and have no particular roots set, leaving them free to bop around the world -- think couch surfing kicked up a few notches. Blueground offers apartments to renters in 15 cities on three continents:
- Athens (Greece)
- Austin, Texas
- Los Angeles
- New York
- San Francisco Bay Area
- Washington, D.C.
What Blueground does for landlords
Landlords in the Blueground network are guaranteed a full rental income regardless of occupancy rate. Landlords rent to Blueground, generally for one to three years, allowing the company to furnish or re-furnish and redesign their space to appeal to the intended audience.
Blueground then rents the space to guests -- often business professionals from large multinational companies. The average stay is five months. What makes Blueground a proptech company is the proprietary software system it uses, allowing guests to book online. Pricing is done through algorithms.
During the pandemic when people were on lockdown, Blueground still managed to maintain a 92% occupancy rate, and landlords were paid. The company even launched three markets during that time and is now cash flow positive. Now that travel restrictions have loosened, the market for Blueground and flexible rental companies like it is growing. Blueground is in hyper-growth mode.
As with any type of large, institutional landlord situation, the experience among renters varies. Of the reviewers on Trustpilot, 58% rated Blueground as being excellent, and 24% rated it as bad. Complaints were usually about cleanliness issues and lack of responsiveness to maintenance requests -- the usual with institutional investors.
The Millionacres bottom line
As long as employees can work remotely, Blueground should stay busy. But that's a big if. As it stands today, employers want employees to return to the office. There's a good chance that more people will be working remotely than was the case pre-pandemic, but no one has a crystal ball. In the meantime, people seem to be taking advantage of this nomadic lifestyle.