Furnished rental startup Blueground defies proptech woes with revenue of $560 million, a new raise of $45 million

Alex Chatzieleftheriou founded Blueground in 2013 after being frustrated by the shortage of short-term furnished housing in Europe. He traveled as a McKinsey consultant and lived almost exclusively in hotel rooms for months.

“Once, a company needed to pay as much as €15,000 for a hotel room in Amsterdam. And there wasn’t enough space or kitchen to cook,” he said. “I attempted renting apartments for a month or longer. However, it was difficult and the owners weren’t open to purchasing furniture. So I created a company that solved my problem.

Just a few years later, at the peak of the pandemic, business in his startup’s category of short-term furnished apartment rental firms was booming as people roamed the world working from home.

Now that many employers have called staff back to offices, demand for temporary housing has dropped.

Some of his competitors didn’t survive. Life of Zeus AND Hike they locked the door and returned the keys. Some became acquisition opportunities for Blueground. In 2022, the corporate gained a strong position in Latin America, including: I purchase Tabas, operator of over 9,000 furnished apartments in Brazil. Within a few months, Blueground took over Travelers’ haven, a 15-year-old company that gives on-demand housing to staff in nearly 20,000 cities across the United States. In 2023, it acquired Nestpick, a marketplace for furnished apartment operators corresponding to Kasa and Placemakr, providing customers with access to additional 18,000 apartments.

Blueground currently operates a global network of move-in ready homes for stays of a month or longer and has raised $45 million in Series D funding from new investor Susquehanna Private Equity Investments along with other backers including WestCap, Chatzieleftheriou told TechCrunch. The New York-based company said it also secured a debt facility from Barclays with participation from Morgan Stanley, Deutsche Bank and HSBC, which replaced and augmented Blueground’s $40 million debt facility obtained from Silicon Valley Bank in 2021.

Blueground rents apartments in popular neighborhoods after which furnishes and furnishes them to tenants. Currently, the corporate manages 15,000 apartments in 32 markets in 17 countries. In addition to stepping into its own leases, Blueground recently introduced franchising, which works with local operators in Japan and Thailand and lists units of third-party operators on its platform.

The company didn’t disclose a new valuation, but Chatzieleftheriou said the corporate’s value has increased because the previous round. This the valuation was reportedly $750 million After raising $140 million in Series C in September 2021.

It’s no secret that the fundraising environment has been extremely difficult for late-stage firms, especially those within the proptech sector, which is struggling with rising rates of interest.

Chatzieleftheriou told TechCrunch that his company’s rapid growth and near-profitability helped persuade investors to commit to the newest financing.

Chatzieleftheriou said sales increased 70% to $560 million in 2023, compared with $300 million in gross revenue in 2022. Net margin on sales – that’s, after paying landlords for rent – is around 35%, he added, and he expects that Blueground might be money flow positive in 2024.

While further acquisitions seem likely given Chatzieleftheriou’s predictions of industry consolidation, the immediate focus is to integrate recent purchases. The new financing might be used for market expansion, technology investments and maybe the last word financial goal: an initial public offering.