Startups have spent the last decade trying to offer every variation of Airbnb they can imagine. but Ukio Thinks it has found a way through the growing confusion of housing rental competitors — and regulators — precisely as remote working becomes the norm.
It offers rentals of one month or more in partnership with local property owners featuring a turnkey premium experience in prime city locations. Initial results have been promising.
The Barcelona, Spain-based company was founded early last year and has grown to over 100 apartments between that city and Madrid while maintaining a 95% occupancy rate.
Today it is announcing a sizable $9 million seed round from top European investors, which it plans to grow to more than 700 apartments in six continental capitals by 2022. Lisbon is the next city on the list, followed by London and Berlin.
According to cofounder and CEO Stanley Forto*, so far Ukio’s guests are almost evenly split between the two use-cases. One half is made up of new long-term residents who have landed local jobs and will eventually move into permanent housing. So far, this group tends to last six months or more.
Forteau, a longtime director at Airbnb, says the mainstreaming of remote and distributed work has also brought a growing group of digital nomad types looking for something more than short-term rentals. This half of the user base persists for about two or three months till date.
To point to that market opportunity, he cited gartner report The remote-worker demographic is showing that could grow to 31% of all workers by the end of this year. But readers may find this number a bit conservative. For example, the proptech investors I surveyed for Xtra Crunch in March described office space as a more luxury in the future, with more workers living wherever they wanted – entertainment and community For fun “third place” places, like how many European cities are known for.
Ukio, which is Japanese for “live in the moment,” is hardly the only startup aiming at this changing demographic. Some of the prominent ones on their long list include Blueground, Sonder, Sentinel, and Zeus (plus Airbnb’s long-term rental options). So what’s different here?
“Ukio rents, furnishes and manages properties to oversee the entire guest experience,” explains Fourteau. “Our vertically integrated approach allows us to professionalize supply for platforms like Airbnb (a peer-to-peer marketplace), just as global hotel chains professionalize supply for Booking.com.”
The idea originated from his time at Airbnb, where user demand for long-term rentals doesn’t really fit the company’s platform model. the main focus of [that] The company continues to strengthen and grow its relationship with its host community,” he says. If Airbnb were to create a vertically integrated rental operator like Ukio, “it would compete with their existing community and could compromise their relationship with them.”
He says that today, the most desirable long-term rentals in a city are taken before they are posted on Airbnb, or taken off the platform before demand is met. Apartments operated by Ukio, on the other hand, “will remain a part of that community for many years to come.”
He believes that Ukio’s relationship with property owners is another way to moat around key locations. “We engage in 7-10 year lease contracts with full tenant management. These agreements optimize their returns, avoid vacancy rates and reduce management costs. Ukio offers them guaranteed returns and a hassle Provides free solutions.As a business, we now receive more inbound requests from landlords willing to work with Ukio than targeted outreach, with a strong supply pipeline slated for growth next year.
Here’s a more nuanced look at what it sees as providing differentiation long-term, explained for brevity: Ukio uses a 200-point process to choose potential apartments and only those with the best of owners in prime locations. Works. Many of these are single units, allowing for more of a mix spread across a city than a startup like Central that uses the entire building. Each unit also gets a unique design as compared to the templated approach of Blueground and a few others. While many competitors are primarily platforms with hosts providing and managing their units, Yukio has an internal team to manage all assets. It is also starting out with a focus on Europe, while many of its direct competitors, such as Zeus, are focused on the US.
On the technical side, in addition to supply acquisition tools, it uses a dynamic pricing model to help keep occupancy high, and an internal design system and catalog to reduce installation and onboarding costs . Ukio’s product-focused cofounder, Stanley’s brother Jeremy, has a decade of experience in leading roles at Zynga, EA, Headspace, and most recently, Notel.
As a company whose core product is physical, Ukio faces the risks of tightening local regulations as well as restrictions related to COVID. Forteau (Stanley) acknowledged the issues but argued that Yukio’s company’s particular model is better suited to cope because it is getting such heavy use from long-term locals. The big question at this stage seems to be Ukio’s various well-funded competitors, who will undoubtedly change their model frequently to attract the remote workers of the future.
And therefore, the need for rapid scaling is the reference for large sized seed rounds. It was led by French venture firm Breega, with participation from Heartcore and PartTech, and included Angels, CoverWallet founder Iaki Berenguer, and Travelper founder Avi Meir.
- Disclosure: I went to college with Stan about 20 years ago, but lost contact with us a decade ago before he sent me this news.