There’s little doubt that the home share sector is beginning to boom globally among business travelers, with millennials adopting the practice at a greater rate than their older counterparts (as millennials are wont to do).
For their part, Rakuten recently made a major investment in a Singapore startup as a means to break into the growing business travel side of home share.
The Japanese internet company just pitched in SG$4 million ($2.8 million) to Singapore-based home share startup MetroResidences, a service that matches corporate employees looking to rent properties for a month or more in Singapore with owners seeking short-term tenants. The funding goes toward MetroResidences’ Series A round.
To date, the Singapore startup has raked in just under SG$5 million ($3.52 million) in three rounds including the latest Rakuten investment, which TechCrunch said MetroResidences will use to fuel its expansion into urban markets in Hong Kong and Tokyo.
But as MetroResidences expands into other markets, it’s almost certain to run up against home share giant Airbnb, which has spent the past few years slowing gaining traction among global business travelers.
The frequency with which business travelers expense an item from Airbnb increased by 32 percent between 2015 and 2016. Further, Airbnb penned a deal with American Express Global Business Travel last year that sees Amex GBT referring its corporate travelers to Airbnb services. And in March of this year, Airbnb eyed a collaboration with Sabre to grow exposure to corporate travelers on the Sabre network.
Still, MetroResidences is not too concerned about Airbnb as it eyes expansion, cofounder Lester Kang told TechCrunch. Airbnb remains most popular among individual consumers, with corporate bookings making up just a tenth of total volume on the platform.
“[Airbnb] is getting serious with business-ready apartment program,” Kang told TechCrunch. “But with large corporates, you can’t tell your guests to go pick up the key from under the flowerpot.”
MetroResidences’ typical users are either expats or multinational corporate employees sent to Singapore for a few months on assignment. Kang said that the startup’s service replaces hotel stays while also providing a more selective batch of residences to choose from.
On the homeowner’s end, the home share startup doesn’t reportedly charge a listing fee but instead takes a 10 to 25 percent cut of the booking. Kang told TechCrunch that owners on the startup’s platform will make on average 30 to 40 percent more revenue over gains from a regular lettings agency.
To date, the company reports renting out over 115,000 room nights from more than 800 corporate clients.
MetroResidences reportedly sees synergies between their service and the travel arm of Rakuten. While a potential merger may be in the cards down the line, the startup’s current focus is to regionalize their home share platform and moving into additional markets.