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Airbnb has well and truly disrupted the world of travel accommodation, changing the conversation not just around how people discover and book places to stay, but what they expect when they get there, and what they expect to pay. Today, one of the startups riding that wave is announcing a significant round of funding to fuel its own contribution to the marketplace.

Domio, a startup that designs and then rents out apart-hotels with kitchens and other full-home experiences, has raised $100 million ($50 million in equity and $50 million in debt) to expand its business in the U.S. and globally to 25 markets by next year, up from 12 today. Its target customers are millennials traveling in groups or families swayed by the size and scope of the accommodation — typically five times bigger than the average hotel room — as well as the price, which is on average 25% cheaper than a hotel room.

The Series B, which actually closed in August of this year, was led by GGV Capital, with participation from Eldridge Industries, 3L Capital, Tribeca Venture Partners, SoftBank NY, Tenaya Capital and Upper90. Upper90 also led the debt round, which will be used to lease and set up new properties.

Domio is not disclosing its valuation, but Jay Roberts, the founder and CEO, said in an interview that it’s a “huge upround” and around 50x the valuation it had in its seed round and that the company has tripled its revenues in the last year. Prior to this, Domio had only raised around $17 million, according to data from PitchBook.

For some comparisons, Sonder — another company that rents out serviced apartments to the kind of travelers who have a taste for boutique hotels — earlier this year raised $225 million at a valuation north of $1 billion. Others like Guesty, which are building platforms for others to list and manage their apartments on platforms like Airbnb, recently raised $35 million with a valuation likely in the range of $180 million to $200 million. Airbnb is estimated to be valued around $31 billion.

Domio plays in an interesting corner of the market. For starters, it focuses its accommodations at many of the same demographics as Airbnb. But where Airbnb offers a veritable hodgepodge of rooms and homes — some are people’s homes, some are vacation places, some never had and never will have a private occupant, and across all those the range of quality varies wildly — Domio offers predictability and consistency with its (possibly more anodyne) inventory.

“We are competing with amateur hosts on Airbnb,” said Roberts, who previously worked in real estate investment banking. “This is the next step, a modern brand, the next Marriott but with a more tech-powered brain and operating model.” These are not to be confused with something like Hilton’s Homewood Suites, Roberts stressed to me. He referred to Homewood as “a soulless hotel chain.”

“Domio is the anti-hotel chain,” he added.

Roberts is also quick to describe how Domio is not a real estate company as much as it is a tech-powered business. For starters, it uses quant-style algorithms that it’s built in-house to identify regions where it wants to build out its business, basing it not just on what consumers are searching for, but also weather patterns, economic indicators and other factors. After identifying a city or other location, it works on securing properties.

It typically sets up its accommodations in newer or completely new buildings, where developers — at least up to now — are not usually constructing with short-term rentals in mind. Instead, they are considering an option like Domio as an alternative to selling as condominiums or apartments, something that might come up if they are sensing that there is a softening in the market. “We typically have 75%-78% occupancy,” Roberts said. He added that hotels on average have occupancy rates in the high 60% nationally.

As Domio lengthens its track record — its 12 U.S. markets include Miami, Los Angeles, Philadelphia and Phoenix — Roberts says that they’re getting a more select seat at the table in conversations.

“Investors are starting to go out to buy properties on our behalf and lease them to us,” he said. This gives the startup a much more favorable rate and terms on those deals. “The next step is that Domio will manage these directly.” The most recent property it signed, he noted, includes a Whole Foods at the ground level, and a gym.

Using technology to identify where to grow is not the only area where tech plays a role. Roberts said that the company is now working on an app — yet to be released — that will be the epicenter of how guests interact to book places and manage their experience once there.

“Everything you can do by speaking to a human in a traditional hotel you will be able to do with the Domio app,” he said. That will include ordering room service, getting more towels, booking experiences and getting restaurant recommendations. “You can book your Uber through the Domio app, or sync your Spotify account to play music in the apartment.

And there are plans to extend the retail experience using the app. Roberts says it will be a “shoppable” experience where, if you like a sofa or piece of art in the place where you’re staying, you can order it for your own home. You can even order the same wallpaper that’s been designed to decorate Domio apartments.

Ripe for the booking

Although Airbnb has grown to be nearly as ubiquitous as hotels (and perhaps even more prominent, depending on who you are talking to), the wider travel and accommodation market is still ripe for the taking, estimated to reach $171 billion by 2023 and the highest growth sector in the travel industry.

“Airbnb has taught us that hotels are not the only place to stay,” said Hans Tung, GGV’s managing partner. “Domio is capitalizing on the global shift in short-term travel and the consumer demand for branded experiences. From my travels around the world, there is a large, underserved audience — millennials, families, business teams — who prefer the combined benefits of an apartment and hotel in a single branded experience.”

I mentioned to Roberts that the leasing model reminded me a little of WeWork, which itself does not own the property it curates and turns into office space for its tenants. (The SoftBank investor connection is interesting in that regard.) Roberts was very quick to say that it’s not the same kind of business, even if both are based around leased property re-rented out to tenants.

“One of the things we liked about Domio is that is very capital-efficient,” said Tung, “focusing on the model and payback period. The short-term nature of customer stays and the combination of experience/price required to maintain loyal customers are natural enforcers of efficient unit economics.”

“For GGV, Domio stands out in two ways,” he continued. “First, CEO Jay Roberts and the Domio team’s emphasis on execution is impressive, with expansion into 12 cities in just three years. They have the right combination of vision, speed and agility. Domio’s model can readily tap into the global opportunity as they have ambition to scale to new markets. The global travel and tourism spend is $2.8 trillion with 5 billion annual tourists. Global travelers like having the flexibility and convenience of both an apartment and hotel — with Domio they can have both.”

Read more: https://techcrunch.com/2019/12/17/domio-raises-100m-in-equity-and-debt-to-take-on-airbnb-and-hotels-with-its-curated-apartments/

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. WeWork withdraws its S-1 filing, will delay its IPO

The move was widely expected, but The We Company (which owns WeWork) made it official yesterday, with new co-CEOs Artie Minson and Sebastian Gunningham declaring that they’ve “decided to postpone our IPO to focus on our core business.”

Since the company’s S-1 became public, it has faced intense scrutiny over the general state of its finances, and more specifically over the power and behavior of Adam Neumann, who stepped down as CEO last week.

2. Europe’s top court says active consent is needed for tracking cookies

It’s a decision that plunges many websites into legal hot water in Europe. The Court says consent must be obtained prior to storing or accessing non-essential cookies, such as tracking cookies for targeted advertising.

3. Twitter launches its anti-abuse filter for Direct Messages

Twitter is rolling out its spam and abuse filter for Direct Messages, a month and a half after the company announced it had started testing the feature. This should be useful for people who want to keep their DMs open without having to see abusive content.

4. Microsoft OneDrive Personal Vault rolls out worldwide, launches expandable storage

Earlier this summer, Microsoft introduced an extra layer of security for its OneDrive product, allowing users to protect their files with two-step verification. Now it’s rolling this feature out worldwide.

5. Pandora puts its personalization powers to work in a revamped app

The company’s new mobile experience includes a dedicated “For You” tab where a continually updated feed of content is presented to users, including music and podcast recommendations.

6. Rapyd raises $100M for its ‘fintech as a service’ API, now valued at nearly a $1B valuation

Currently, Rapyd lets customers use its API to enable checkout, funds collection, fund disbursements, compliance as a service, foreign exchange, card issuing and integration.

7. SmartNews’ head of product on how the news discovery app wants to free readers from filter bubbles

SmartNews’ Jeannie Yang talks about the app’s place in the media ecosystem, creating recommendation algorithms that don’t reinforce biases, the difference between its Japanese and American users and the challenges of presenting political news in a highly polarized environment. (Extra Crunch membership required.)

Read more: https://techcrunch.com/2019/10/01/daily-crunch-wework-delays-its-ipo/

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here.

1. As Adam Neumann reportedly faces pressure to step down; it’s looking like a fight for life between WeWork and SoftBank

Members of WeWork’s board of directors are pressuring controversial CEO Adam Neumann to step down and become non-executive chairman, according to The Wall Street Journal.

Apparently the pressure originates with investor SoftBank, which needs The We Company’s IPO to go well. The idea is to keep Neumann involved, while also making room for new leadership that could make Wall Street more comfortable with a WeWork IPO.

2. How Peloton made sweat addictive enough to IPO

Speaking of IPOs, Josh Constine breaks down 13 reasons why this fitness company — which is about to go public — has built up such a devoted cult. Ultimately, he says he’s bullish about Peloton because people will always be busy, lazy and competitive.

3. Amazon’s ‘Fleabag’ wins four Emmys, including best comedy series

Netflix didn’t go home empty-handed either, with wins for “Ozark,” “When They See Us” and “Black Mirror.”

disrupt

4. 100 Thieves’ Nadeshot and Scooter Braun are coming to Disrupt

The esports organization, founded by Matthew “Nadeshot” Haag, has grown over the past couple of years into a household name for those who follow gaming. Haag will be joined on the Disrupt stage by 100 Thieves co-owner Scooter Braun, who also manages megastars like Justin Bieber and Arianna Grande.

5. Kabbage founders drum up $11M for Drum, an SMB marketplace for sourcing salespeople, goods and services

Drum bills itself as a marketplace for businesses to source sales people and sell their goods and services. Co-founder Rob Frohwein said the startup is “democratizing access to a physical salesforce.”

6. How Kobalt is betting on music’s middle class and DIY stars

This is the latest installment in our in-depth EC-1 profile on Kobalt Music Group. The company’s CEO Willard Ahdritz predicted years ago that streaming and social media would increasingly undercut the gatekeeping power of the major label groups, realigning the market to center on a vast landscape of niche musicians. (Extra Crunch membership required.)

7. This week’s TechCrunch podcasts

The Equity team debates one of the most cherished beliefs in Silicon Valley, the “cult of the founder.” Meanwhile, Original Content catches up on the soothing Netflix reality show “Terrace House.”

Read more: https://techcrunch.com/2019/09/23/daily-crunch-wework-ceo-faces-investor-pressure/