Milwaukee-based serviced apartment rental company
Frontdesk
has
landed a $6.8 million Series A round in a combination of debt and equity.
The company is not naming the participating investors but says
they are existing investors and that they increased the funding by almost $3
million after the coronavirus crisis developed. In announcing its
$2.75 million
bridge round last August
, Frontdesk named investors including La Macchia
Holdings, Sand Hill Angels and Motivate Ventures.
Founded in 2017, Frontdesk currently operates in 28 cities, managing
the entire guest experience for its more than 500 apartment suites using its
proprietary technology stack.
The company says prior to the coronavirus, average length of stay
was 2.5 days as both leisure and business travelers booked on Frontdesk primarily
as an alternative to a hotel.
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Now the average stay is 21 days, and co-founder and chief product
officer Jesse DePinto says the company sees an opportunity to offer its product
as solution for people who want an alternative to a traditional apartment lease
in this new “world of uncertainty.”
“Now that employers are getting more pressure to allow people to
work from home, the next natural progression is the ‘work from anywhere’ movement.
People aren’t going to be tethered to a cubicle, and they cannot be tied down
to a 12-month lease,” says co-founder and chief product officer Jesse DePinto.
“So we think the way people are living, not just traveling, after COVID
is going to look entirely different.”
Frontdesk offers stays from one night up to six months. Its
digital platform enables users to select and book an apartment, be verified and
approved and receive access codes all within an hour.
DePinto says this funding is an indication that the company’s
investors recognize this opportunity and that Frontdesk is in a strong position
as “the deck is definitely going to be reshuffled” in the residential rental
space.
“The way we commute, the way we travel, everything else in our lives
has been digitized and offered as a service model,” he says.
“But the way we live is still stuck with 12-month lease contracts,
two-week approval processes, physical paper signing for contracts, physical tours,
buying your own furniture, setting up your own internet, all the things we just
tolerate because that’s the way it is.”
In
mid-April Frontdesk laid off 35 of its 241 employees – mostly in part-time
cleaning positions its apartments - but DePinto says the company hopes to
rehire those employees as business picks up.