Investments

Airbnb Challenger WhyHotel Scores $20M For Luxury Room Rentals

WhyHotel Scores $20M For Luxury Room Rentals

WhyHotel, a company that offers pop-up hotel rooms in recently built luxury apartments, has raised $20 million in a Series B funding round, according to a report by VentureBeat.

With the advent of Airbnb, a number of startups have been created in its wake, with the intent of disrupting the hotel industry and encouraging new ways for people to relocate and take vacations. WhyHotel has raised $35 million so far.

The funding round was led by Harbert Growth Partners, with other participants including Highland Capital Partners, Camber Creek, Working Lab Capital, Geolo Capital, Revolution’s Rise of the Rest Seed Fund and former Bain Capital Partners MD Mark Nunnelly all participated in the round.

Since its launch in 2017, WhyHotel has been creating relationships with real estate companies and landlords to help new apartment buildings earn revenue before they’ve sold or leased the units. The company has properties in Seattle, Houston, Arlington and Tysons Corner, Virginia. WhyHotel said it will use the capital injection to extend into additional markets.

“How people use space is evolving at a much faster pace than the three to five years it takes to deliver a high-rise building,” said WhyHotel CEO and Co-founder Jason Fudin. “To address this, we are accelerating innovative real estate offerings for consumers and developers alike.”

The company’s target consumers are people who are relocating, business travelers or those who are renovating their homes and need a temporary place to live.

“Unlike major operators that have been hobbled by delivering products that mismatch long-term lease obligation and short-term consumer contracts, our products are designed with an understanding of real estate cycles in mind and the goal of building a sustainable, profitable business,” Fudin said.

The alternative accommodation market is a growing trend that was spearheaded by Airbnb, which has plans of going public soon. Other companies in the sector, like Sonder, recently raised $210 million and is valued at over $1 billion.

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