Over the past decade, startups have tried to offer every variant of Airbnb they can think of. Ukio believes it has found a way to cut through the ever-growing maze of housing rental companies and regulators as remote work becomes more common.
The company offers rentals for one month or more, and offers a premium turnkey experience in prime locations with local property owners. Initial results look promising.
Barcelona-based company, founded in early last year, has more than 100 apartments. It maintains a 95% occupancy rate.
It announced today a large-sized seed round, of $9 million, from top European investors. The company plans to expand to 700 apartments in six continent capitals by 2022. Next on the list is Lisbon, followed by London & Berlin.
Stanley Fourteau, cofounder and CEO of Ukios, said that so far Ukios guests are divided almost equally between two use-cases. The other half is made up of long-term residents who are new to the area and have found jobs. They will eventually move into permanent housing. This group has stayed for six months or more.
Fourteau, a long-standing director at Airbnb, says that the mainstreaming remote and distributed work has brought in a growing number of digital nomads who are looking for more than a temporary rental. The majority of this user base stays for around two to three months.
Gartner's report showed that remote workers could make up 31% of all workers in the next year, which he said was a sign of the market opportunity. TechCrunch readers may find this number to be a bit conservative. For Extra Crunch, I interviewed Proptech investors in March. They described office space as a luxury, with more workers living where they want, and having fun third spaces that provide entertainment and community. This is similar to what many European cities are famous for.
Ukio is Japanese for living in this moment. It is not the only startup that is targeting this demographic. Blueground, Sonder and Sentinel are just a few of the many startups that have been mentioned (plus Airbnbs long-term rental options). What's the difference?
Fourteau says Ukio manages, rents, furnishes, and manages properties to ensure a great guest experience. Our vertically integrated approach allows Ukio to professionalize supply on platforms like Airbnb (a peer to peer marketplace), in the same way that global hotel chains professionalize Supply for Booking.com.
He was at Airbnb when he realized that long-term rentals were not a viable option. He says that the company's core focus is to strengthen their relationships with their host communities and grow them. Airbnb could create a vertically integrated rental company like Ukio that would compete with the existing community and compromise their relationship.
He says that the best long-term rentals in cities are often taken before they go up on Airbnb. Ukio-operated apartment will, however, be part of this community for many more years.
Ukios relationship to property owners is another way for him to create a moat around key areas. We offer 7-10 year leases with full tenant management. These agreements maximize their returns by avoiding vacancy rates, and reducing management expenses. Ukio offers guaranteed yields and a hassle-free solution. We now get more requests from landlords to work with Ukio as a business than targeted outreach. With a strong supply pipeline, Ukio has the potential for significant growth over the next year.
This is a more detailed look at his vision of what differentiates long-term. Paraphrased for clarity, Ukio uses a 200 point process to select potential apartments. He only works with owners who have the best units in prime locations. These units are often single units which makes it easier to have a variety of apartments spread out across the city than startups like Sentral who use whole buildings. Every unit is unique, unlike Blueground's templated approach. Ukio is a platform that hosts manage their own units. However, many of its competitors do this through platforms. Ukio is also focusing on Europe at the beginning, while Zeus and other direct competitors are primarily focused on the US.
Tech-wise, Ukios uses a dynamic pricing system to keep occupancy high and has an internal design system with a catalogue and catalog to lower installation and onboarding expenses. Stanleys brother Jeremy is Ukio's product-focused founder. He has a decade of experience in key roles at Zynga and EA, Headspace, Knotel, and most recently Knotel.
Ukio, whose core product is physical products, faces the risk of local regulations being tightened as well as COVID restrictions. Fourteau (Stanley), acknowledged the problems but claimed that Ukio's model is better suited for handling them because it is being used so heavily by long-term residents. Ukios well-funded competitors are the bigger question at this stage. They will undoubtedly tweak their models frequently to attract remote workers in the future.
This is why the large-sized seed round was necessary. The venture was led by Breega, a French venture firm, with participation from Heartcore, Partech, as well as angels Avi Meir, founder and CEO of Travelperk, and Iaki Berenguer, founder and CEO of Coverwallet.
