Flexible apartment rental specialist Blueground has snagged $50M in a Series B round of financing that was led by WestCap and Prime Ventures. The company, founded in Greece in 2013, launched U.S. operations last year.
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Blueground's business model has some similarities to coworking, though it operates in the residential space. The company leases blocks of luxury apartments from owners — often developers who have just completed a property — and then subleases them to individuals, typically those in need of accommodation for a month or longer.
Like Zeus Living and 2nd Address, Blueground targets mobile professionals who stay in place too long for a hotel to be comfortable, but not long enough for a standard lease, Commercial Observer reports.
“We bring them a new type of demand,” Blueground CEO Alexandros Chatzieleftheriou told The New York Times, referring to apartment landlords who are especially keen to ink deals with Blueground in a period of oversupply of luxury apartments, such as New York has experienced in recent years.
Blueground leases apartments at market rate for one- to four-year terms.
The value-add part of the play is that Blueground takes these vacant units and furnishes them, especially with tech features that its customer base expects. The company also offers more flexible terms — again, something like coworking — at prices that often compare favorably, during medium- and long-term stays, to the short-term pricing structures found in standard hospitality properties, Tech Crunch reports.
"I've spent approximately five years staying at hotels," Chatzieleftheriou told Bisnow. "For me it was not very sustainable and not a pleasant experience. I thought [living like this] wasn't sustainable for people."
There was a gap in the process that needed a consistent approach for business travelers, he said.
Blueground plans to use the funding partly to expand its presence in both the United States and Europe. By the end of 2019, Blueground plans to begin offering rentals in London, Paris and Seattle, Crunchbase reports.
Blueground currently has 2,800 apartment units in nine cities, including New York, Los Angeles, San Francisco, Boston, Chicago, Washington, D.C., Dubai, Istanbul and Athens. The company says it plans to have a presence in 50 cities around the world and a portfolio of more than 50,000 apartments by 2023.
Earlier this year, Blueground raised $20M in a financing Series A round led by Athens-based VentureFriends. Endeavor Catalyst, as well as Dubai-based Jabber Internet Group, joined that round, along with serial entrepreneur Kevin Ryan.
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