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Furniture rental startup Blueground overcomes real estate tech woes with $560 million in revenue, raises $45 million in new funding

Alex Chatzieleftheriou founded Blueground in 2013, frustrated by the lack of furnished short-term apartments in Europe. He had been traveling as a consultant for McKinsey, living almost exclusively in hotel rooms for months.

“At one point, the company had to pay up to €15,000 for a hotel room in Amsterdam. And there was not enough space and no kitchen to cook in,” he said. “I tried renting an apartment for a month or more. But it was difficult, and the landlord wasn’t willing to buy furniture. So I created a business that would solve my problem.”

A few years later, at the height of the pandemic and with people roaming the world working from home, his startup’s business — a furnished, short-term apartment rental company — was booming.

Now that many employers have called employees back to the office, demand for temporary housing has dropped significantly.

Some of his rivals did not survive. Zeus life and Roam Dash Close the door and return the key. Some of these became acquisition opportunities for Blueground. In 2022, the company established a strong foothold in Latin America through: Buy Tabas, operates more than 90,000 furnished apartments in Brazil.Within months, Blueground was in trouble traveler’s paradiseis a 15-year-old company that provides on-demand housing to employees in nearly 20,000 cities across the United States. In 2023, it acquired Nestpick, a marketplace for furnished apartment operators like Kasa and Placemakr that gives customers access to 18,000 additional apartments.

Chatzieleftheriou told TechCrunch that Blueground currently operates a global network of ready-to-move-in homes for a month or more and has raised a $45 million Series D from new investor Susquehanna Private Equity Investments as well as other backers including WestCap Financing. The New York-based company said it also secured a debt facility from Barclays, with participation from Morgan Stanley, Deutsche Bank and HSBC, replacing and expanding the $4,000 that Blueground received from Silicon Valley Bank in 2021. Thousands of dollars in debt.

Blueground rents out apartments in popular neighborhoods and then provides tenants with equipment and furniture. The company currently manages 15,000 apartments in 32 markets in 17 countries. In addition to leasing its own, Blueground recently launched a franchise, partnered with local operators in Japan and Thailand, and lists units from third-party operators on its platform.

The company did not disclose its new valuation, but Chatzieleftheriou said the company’s value has increased since its last funding round.That Reportedly valued at $750 million back Raised $140 million in Series C funding in September 2021.

It’s no secret that the financing environment is extremely challenging for later-stage companies, especially those in the real estate technology sector that have been hit by rising interest rates.

Chatzieleftheriou told TechCrunch that his company’s rapid growth and near profitability helped convince investors to pony up the latest funding.

Chatzieleftheriou said sales in 2023 will increase 70% from total revenue of $300 million in 2022, to $560 million. He added that net sales margin, or profit margin after paying rent to landlords, is about 35%, and he expects Blueground to be cash flow positive in 2024.

While further acquisitions appear likely, the current focus is on integrating these recent acquisitions, given Chatzieleftheriou’s predictions of industry consolidation. The new funds will be used for market expansion, technology investments, and a possible ultimate financial goal: an initial public offering.

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