Amid a difficult economic environment and the consolidation of the business, Blueground, the top provider of temporary, furnished flat rentals, has successfully obtained $45 million in Series D funding. The investment, spearheaded by Susquehanna Private Equity Investments, highlights the company’s ability to withstand challenges and its potential for expansion in the changing proptech industry.
“Blueground has emerged as the global leader in furnished, flexible apartments for 30+ day stays with its ability to operate profitably in this market and continuously improve financial performance,” said Dean Carlson, head of digital asset investments at Susquehanna.
SUMMARY
– Blueground has raised $45 million in Series D funding, led by Susquehanna Private Equity Investments, amid a challenging economic climate for proptech companies.
– The company has expanded globally through strategic acquisitions, including Tabas in Brazil, Travelers Haven in the US, and Nestpick in Europe. It has a network of over 15,000 move-in-ready apartments in 32 markets across 17 countries.
– Blueground’s revenue grew by 70% in 2023 to $560 million, with a gross margin of approximately 35%, and it expects to achieve positive cash flow in 2024.
– The company is exploring further market expansion, technology investments, and an IPO as potential financial goals.
– Despite challenges in the industry, Blueground’s financial strength and strategic acquisitions position it well for continued growth and innovation in the evolving real estate landscape.
Blueground was established in 2013 by Alex Chatzieleftheriou as a response to the need for more satisfactory choices for temporary furnished homes in Europe. The company has experienced significant growth, taking advantage of the growing need for adaptable living arrangements and the surge in remote work.
“One time the company had to pay up to €15,000 for a hotel room in Amsterdam. And there wasn’t enough space nor a kitchen to cook,” said Chatzieleftheriou, reflecting on his tenure as a consultant, during which he resided in hotel rooms for extended periods of many months.”I tried renting apartments for a month or more, but it was difficult, and landlords weren’t open to buying furniture. So I created a business that would solve my problem.”
The pandemic served as a lucrative period for Blueground, as individuals sought transient accommodations while engaging in remote work from different places. Nevertheless, as people resume working in physical office spaces, the need for temporary accommodation has decreased, resulting in the closure of several competitors.
Blueground has successfully navigated this economic slump by implementing a combination of strategic acquisitions and operational efficiency. In 2022, the firm purchased Tabas, a prominent provider of more than 9,000 fully furnished apartments in Brazil, enhancing its market position in Latin America. In addition, it acquired Travellers Haven, a well-established company that offers immediate lodging solutions to employees in approximately 20,000 cities across the United States. It also bought Nestpick, a platform that connects furnished apartment providers.
Blueground’s global presence has been further enhanced through these purchases, allowing customers to conveniently access a wide range of fully furnished houses for visits lasting a month or longer in 32 cities spanning 17 countries.
“We’re seeing a lot of consolidation in the industry,” said Chatzieleftheriou, predicting further acquisitions in the future. “We’re in a good position to take advantage of that.”
In addition, Blueground has secured a financing facility from Barclays, Morgan Stanley, Deutsche Bank, and HSBC. This facility has substituted and augmented the debt amount acquired by Blueground from Silicon Valley Bank in 2021, which totaled $40 million. Blueground has successfully obtained money from its Series D round.
The organization has demonstrated excellent financial performance. In 2023, sales significantly increased by 70%, reaching a total of $560 million. This is a substantial improvement compared to the previous year’s gross revenue of $300 million in 2022. Blueground’s gross margin, which accounts for lease payments to landlords, stands at roughly 35%. Chatzieleftheriou anticipates that Blueground will achieve positive cash flow by 2024.
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By Proptechbuzz
By Ravi Kumar
