What down market? These short-term rental startups just raised multimillion dollar rounds.
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Happy Thursday, folks! Hope you’re having a great week so far. Has it been as busy for you as it’s been for us? Today our lead item comes all the way from the Middle East. Asia Editor Peden Doma Bhutia brings funding news, linking the UAE and San Francisco. Also on the agenda today is Airbnb’s new housing council – Executive Editor Dennis Schaal has the deets.
Alright, let’s go:
- Silkhaus’ multi-million dollar funding
- Airbnb’s housing council
- Overmoon’s $80 million debut
Silkhaus’ New Money
Silkhaus, a short-term rental platform based in the United Arab Emirates, has secured a “multi-million” dollar pre-series A financing from San Francisco venture firm Partners for Growth.
- Founded in 2021, Silkhaus had raised $7.75 million in 2022, and it was considered one of the largest seed rounds in the Gulf region. The startup anticipates a market opportunity of $18 billion by 2026 across the Middle East and North Africa, South Asia, and Southeast Asia. Silkhaus claims it has seen120% growth in the past 12 months.
- The agreement also includes access to a multi-million dollar credit line for expansion. While the specific funding amount remains undisclosed, Silkhaus plans to use the funds to expand in current markets like Dubai and Abu Dhabi, enter new markets such as Riyadh, and increase its supply.
- The CEO, Aahan Bhojani, emphasized the company’s growth and expressed excitement about partnering with Partners for Growth as they scale Silkhaus across the Gulf Cooperation Council.
The Middle East’s short-term rental market is poised for growth, driven by the region’s tourism goals and regulatory frameworks supporting the holiday home rental process. The UAE’s regulatory changes align with its goal of hosting 40 million tourists by 2030 and contributing $123 billion to the national GDP, writes Skift’s Peden Doma Bhutia.
Airbnb’s Housing Council
It looks like Airbnb is responding to all the flack it has been subject to over the years regarding its impact on affordable housing. Airbnb has established the Airbnb Housing Council to address regulatory challenges and prevent a recurrence of situations like the de facto ban on short-term rentals in New York City, Dennis Schaal writes.
Here are the details:
- Why? The company aims to balance its interests with those of U.S. cities and communities and avoid strict regulations.
- Who? The council, chaired by former Baltimore Mayor Stephanie Rawlings-Blake, will advise Airbnb on policies to promote long-term housing expansion and address housing affordability challenges.
- Why now? While Airbnb argues that short-term rentals have minimal impact on housing costs, various studies suggest a correlation between Airbnb listings and property price and rent increases, particularly in vacation destinations.
- What else? Airbnb is engaging with jurisdictions worldwide to establish regulations that accommodate its operations while addressing local concerns. The company has also contributed financially to affordable housing initiatives and supported measures like the Colorado ballot Prop 123 to fund new housing.
Over the Moon With $80 Million
Overmoon, a tech-enabled vacation rental platform, has secured $80 million in debt and equity funding as it emerges from stealth mode. Founded in 2021 by Joe Fraiman, previously associated with the Airbnb-backed startup Lyric, Overmoon is launching Overmoon Exchange in collaboration with Flock Homes. This fintech-enabled program, offers vacation home owners benefits such as tax advantages, time savings, and investment perks into their 721 Fund, which lets an investor easily pass their investment on to their heirs. Overmoon facilitates 721 Exchanges with hundreds of owners seeking retirement.
The funding breakdown includes $10 million for technology development, $30 million in real estate equity for home down payments, and $40 million in debt financing. Backed by investment firms like NFX, Khosla Ventures, Camber Creek, and Sunsar Capital, Overmoon aims to blend hotel comforts with the communal spaces of vacation homes.
Chart of the Day:
It’s a new year for events and the books are already filling up. After Taylor Swift’s Eras Tour took 2023 by a storm, and gave short-term rentals a big jolt, we wanted to see if 2024 events would have a similar effect.
Booking data says yes.
There are plenty of high-profile events on the agenda for 2024 so get ready. This year, we’ll have the Paris Olympics, the Super Bowl and more Taylor Swift tour dates. Data analytics company KeyData crunched the numbers on what the booking data shows. It found that travelers attending these major events are already pushing up occupancy in short-term rentals months ahead of time. It’s key to note that these events are far in the calendar this year. Just like the weather, they are subject to changes.
Bookings at Short-Term Rentals Around Major 2024 Events