When it comes to exploring new cities, Airbnb revolutionized the way people considered accommodations, moving beyond the conventional choices of hotels and guest houses. Now, travelers have flexible alternatives in private homes, enabled by a modern digital platform connecting hosts and guests to book their stays.
Berlin-based startup Habyt aims to replicate this concept for those seeking longer stays in cities, typically ranging from six to nine months, catering to digital nomads and individuals taking advantage of flexible work arrangements. Today, Habyt announces a Series C funding round of €40 million ($42 million) to fuel its expansion efforts.
The substantial size of this funding round is noteworthy, especially given the ongoing constraints in startup funding and the travel industry’s gradual recovery from the impact of the COVID-19 pandemic.
Habyt’s growth contributes significantly to this achievement. The platform now boasts 30,000 “units,” which include full apartments and rooms in apartments across approximately 50 cities. This is a substantial increase from just 5,000 units in 18 cities just a year ago. Additionally, Habyt has made strides in improving its unit economics and claims profitability in several key markets. The company is on track to achieve full-company profitability by 2024.
Similar to Airbnb, Habyt focuses on housing and the physical world but adopts a highly tech-driven approach. All accommodations are listed exclusively online, viewings are conducted virtually, and all transactions, including contracts and document verification, are handled digitally.
CEO and founder Luca Bovone stated, “We are the only player in the co-living market that manages everything, end to end, via a tech platform.” The funding will be utilized to further enhance the tech platform and expand the business across Europe, Asia, and North America.
This all-equity investment includes a strong lineup of backers from both European and U.S. venture capital circles. Korelya Capital and Deutsche Invest co-led the round, with participation from new investors like Exor Ventures, Endeavor Catalyst, and previous investors such as P101, ITALIA500-Azimut, HV Capital, and others.
Habyt has not disclosed its current valuation, but Bovone confirmed that it’s an up round compared to its previous valuation of $200 million. The total capital raised by Habyt now stands at just under $100 million.
Habyt aims to address the gap in the market between short-term rentals lasting less than a month and traditional long-term leases that typically span a year or more. It focuses on tenancies that last between six and nine months, a period that may not be economically feasible for nightly rentals and may not be attractive to landlords seeking more stable tenants. Bovone refers to this as “the sweet spot of medium stays.”
Habyt’s target customers include the estimated 35 million global digital nomads and individuals exploring housing options while waiting for changes in interest rates. The majority of its customers are international individuals who have relocated to other countries, with the remaining 30% being local residents of the cities where they rent through Habyt.
This unique focus allows Habyt to avoid some of the controversies that have plagued short-term rental companies like Airbnb and VRBO. Short-term rentals have been criticized for bringing disruption and instability to neighborhoods and housing markets, potentially affecting local economies.
However, Habyt has faced its own challenges, having grown both organically and through acquisitions, including Hmlet in Singapore in 2022 and Common Living in New York earlier this year. Common Living attracted significant investment and reached a high valuation before experiencing negative publicity, but Habyt has not disclosed the acquisition price for Common.
Habyt may also explore short-term stays in certain markets, as evidenced by the opening of its first hotel in Berlin earlier this year, which quickly achieved full occupancy.
While Airbnb initially focused on privately owned properties to build its inventory, Habyt has taken a different approach, aligning more closely with the hotel industry. The company began by working with private homeowners but quickly shifted towards sourcing inventory from institutional property owners. Habyt collaborates with these property owners to offer a consistent housing experience, all of which are currently furnished accommodations.
Franco Danesi, a partner at Korelya Capital and a board member at Habyt, expressed support for Habyt’s vision of redefining flexible housing, addressing the global housing accessibility issue, and serving diverse customer segments.
