SAN FRANCISCO--(BUSINESS WIRE)--Kasa Living, Inc., the company providing technology-powered flexible accommodations nationwide, announced that it has raised $50 million in funding. The capital includes $30 million in new Series B funding led by Ribbit Capital and $20 million in Series A funding led by FirstMark Capital less than a year ago. Participating investors also include RET Ventures, Zigg Capital, Allegion Ventures, and BoxGroup.
Kasa is leading a new wave of innovation in the hospitality industry, leveraging its proprietary technology and institutional expertise to transform vacant and underutilized real estate into high-quality, trustworthy accommodations for travelers. To date, the company has entered into management agreements with multifamily and hotel property owners in 35 markets across 15 states, enabling its partners to unlock new streams of income and realize the full potential of their buildings.
“We see a generational opportunity to innovate in a beleaguered travel sector. Kasa aspires to build a global accommodations brand beloved by guests, indispensable to property partners, and desired by neighbors,” said Roman Pedan, Founder & CEO of Kasa. “This raise allows us to grow our technology team significantly to power a flexible and distributed hospitality offering that delivers on our mission.”
Over the past nine months, Kasa has grown rapidly despite industry headwinds. Kasa has maintained occupancy rates of approximately 75 percent (more than double the hospitality industry average), expanded units under management by 50 percent, and launched in five new cities. This dramatic increase in market share, together with monthly revenues climbing 50 percent since December, catalyzed a significant increase in Kasa’s valuation in connection with its most recent round.
Kasa plans to accelerate investment in proprietary technology, building on its existing suite of products and systems that has enabled the company to manage units across various property sizes and locations. By leveraging its platform, Kasa has generated positive operating margins, even amid historic hospitality industry lows, while maintaining exceptional guest experiences at an affordable price point in a way that was never before possible. Now, Kasa will redouble its efforts to streamline operations and minimize onsite overhead through cutting-edge features that focus on community safety, guest support, and the Kasa travel experience at all touchpoints.
“What Kasa customers see is just the tip of the iceberg. The enormous operational complexity behind the scenes is tackled by Kasa’s technology platform, allowing them to seamlessly host a large, diverse, and growing network of distributed accommodation units efficiently,” said Nick Shalek, General Partner at Ribbit Capital. “In defining a new, software-driven way to deliver high-quality hospitality, we see Kasa doing to hotels what Amazon Web Services (AWS) did to on-premise servers.”
In addition to creating a seamless experience for guests, Kasa also provides an end-to-end solution for its property partners. Lela Cirjakovic, Executive Vice President of Operations at Waterton, a national multifamily owner, and operator stated, “We selected Kasa as our short-term rental provider of choice after an exhaustive search. Kasa stood out for its relentless focus on the community and partnership. Their innovative process and technology help us provide a better neighbor and guest experience, and ultimately a more harmonious community.”
Pedan was previously an early member of KKR’s Private Equity Real Estate team. He founded Kasa in 2016 alongside pursuing his MBA at Stanford’s Graduate School of Business and was joined by ex-Airbnb Product leader Craig Minoff, who now oversees Product & Operations at Kasa.
Kasa Living, Inc. is a real estate technology company that is building a global accommodations brand. The company partners with owners of multifamily and boutique hospitality properties, transforming vacant and underutilized real estate into stylishly-furnished, professionally managed units that cater to business and leisure travelers seeking trustworthy and comfortable accommodations. Kasa was founded in 2016 by a team that includes technology and real estate professionals who previously drove growth at firms, including Airbnb, KKR, and Apollo. The company is headquartered in San Francisco. For more information, visit http://www.kasa.com.
“Kasa has thrived because of its ability to leverage its technology and operations footprint to deliver a strong value proposition to guests while driving superior profitability to their property partners,” said Adam Nelson, Managing Director at FirstMark Capital. “This trend has accelerated during the pandemic as travelers leaned even more heavily into the reliability, cleanliness, and contact-less check-in available in every Kasa and property owners needed to fill vacancies quickly to deliver reliable, above market cash flows. We’re excited for Kasa to continue to build the operating system that powers its ability to set the standard for guest satisfaction in this sector, and to power short-stay operations for a diverse set of properties across the US, and eventually globally."
“We were initially attracted to Kasa in 2018 by their passion for their mission, their unusual depth of expertise in the combination of real estate, hospitality and technology, and their hyper capital-efficient approach to growth,” said Dave Eisenberg, Founding Partner at Zigg Capital, a real estate-focused venture capital firm. “More recently, we’ve been blown away by how the team has rapidly adapted its operations, technology, and business model to a new COVID-19 world. As a result, they are the rare hospitality company on track to surpass its pre-COVID-19 2020 forecast. In our experience, companies that are able to navigate challenging business environments with alacrity, professionalism, and grace demonstrate the traits that give them a shot at growing into globally respected leaders.”
“Kasa has demonstrated a unique ability to align with property owners and operators including a consistent strategic focus on management and profit-sharing agreements as well as an ability to help monetize “long tail” inventory, which has further separated the company from other short-term rental providers,” said Christopher Yip, Partner at real estate technology-focused venture capital firm RET Ventures. “The team’s dedication to continually refining its model based on feedback from clients — and its commitment to creating a market-leading technology stack to improve the guest experience — convinced us that Kasa was an ideal fit for our portfolio.”
About Ribbit Capital
Ribbit Capital is a global investment firm focused on the intersection of financial services and technology. Ribbit's mission is to change the world of finance by providing capital and guidance to visionary financial services entrepreneurs around the globe, including the founders of Robinhood, Brex, Coinbase, and Juniper Square. Ribbit works with technology founders across five continents and a multitude of sectors within financial services, including payments, personal finance, wealth management, lending, insurance, crypto assets, real estate, and financial software and infrastructure. For more information, please visit www.ribbitcap.com.
About FirstMark Capital
FirstMark Capital is an early-stage venture capital firm based in New York City. FirstMark’s mission is to partner with exceptional entrepreneurs who are changing the world by solving meaningful problems. FirstMark has built a deeply engaged community among the extraordinary teams in its network to spread ideas and opportunities. It has been privileged to work alongside the founders of remarkable businesses like Pinterest, Shopify, DraftKings, Riot Games, Airbnb, and dozens more. Visit FirstMark in New York City or online at www.firstmarkcap.com and @firstmarkcap.
About RET Ventures
A leading real estate technology investment firm, RET Ventures is the first industry-backed early-stage venture fund to strategically focus on helping build cutting-edge “rent tech” — technology for multifamily and single-family rental real estate. RET’s base of Strategic Investors includes some of the largest REITs and private real estate owner-operators and managers, who control approximately 2 million apartment units. Through its deep expertise and connections within the industry, RET has created a unique real estate innovation ecosystem that delivers significant value to the companies it backs, providing them with access to thought leaders, development partners, and ongoing guidance. For more information, please visit www.ret.vc.
About Allegion Ventures
Allegion Ventures is the corporate venture fund of Allegion. It invests in and accelerates the growth of companies with innovative technologies and products that have the potential to make security and access smarter, stronger, faster, and less intrusive. For more information, please visit www.allegionventures.com.
About Zigg Capital
Zigg Capital is a venture capital firm based in New York City that invests globally in technology companies that touch the real estate, construction, or retail industries. Over the last decade, the partners in Zigg have made early-stage investments in leading companies such as Procore, Matterport, Snapdocs, VTS, Kasa, and Tend. For more information, please visit www.ziggcap.com.