I remember watching Demi Lovato (with my kids) when she was on Barney & Friends. Now she's worth $40 million and is investing in a real estate start-up.
Lovato's interest is with yet another newcomer in the fully furnished rental space, a market that caters largely to people who are living the digital nomad lifestyle -- aka high-end couch surfing. This start-up is called June Homes, a proptech company that just raised $27 million in a Series B funding round led by SoftBank Ventures Asia, making the total raised since its founding in 2017 to $50 million.
Other investors in this company include TQ Ventures, FJ Labs, K50 Ventures, Reshape, Quiet Capital, and some angel investors like Lovato.
About the market
There are two keywords these days regarding apartment rentals: furnished and flexible. The rental market for mainly millennials and Gen Z calls for furnished apartments so they can live a flexible lifestyle, picking up and moving to a new town whenever the mood strikes. This so-called digital nomad way of living is made possible through remote working options. And companies like June Homes, of which there are many these days, cater to that market.
About June Homes
Company founder Daniel Mishin started June Homes to provide an alternative to the complicated and expensive process many New York City apartment seekers have when trying to secure city digs. Mishin found the process distasteful from the "prohibitive costs, predatory fees, complicated requirements, [and] long-term lease commitments."
June Homes is in the proptech (property combined with technology) space from its use of a proprietary algorithm that detects mispriced rental apartments. What that means is it can find apartments that aren't living up to their rent potential; maybe they need repairs and renovations or just an updated look.
June Homes has developed a process that can update those units, complete with inspections, upgrades, and renovations and can do that and list those apartments in less than 72 hours. Sounds like a tall order, but that's the claim. Mishin says that in July, while it took, on average, 76 days to rent a New York apartment, tenants can get in a June Homes space in just over a week.
June Homes leases either unfurnished or fully furnished apartments for between one and 18 months. It operates in New York City, Washington, D.C., San Francisco, Los Angeles, Boston, and Philadelphia. People can lease solo, with a roommate, or can enter a co-living space in a shared apartment. Rental rates are supposed to be in line with traditional leases.
Landlords who sign up with June Homes use the company as they would a property manager, as June Homes suggests renovations, gets the tenants, and manages the property.
June Homes plans to use the money from this latest funding round to expand to new markets in the United States and eventually globally. It also plans to hire more staff.
The Millionacres bottom line
Companies like June Homes are sprouting up all over the place, typically in major cities. There's a market consisting of mostly millennials and Gen Z who can live a nomadic lifestyle and enjoy doing so. As long as people can work from any location, there should be a market for this product.