SAN FRANCISCO—Of the $50 million in funding that Kasa Living Inc. has raised, $30 million in new Series B funding was led by Ribbit Capital and $20 million in Series A funding was led by FirstMark Capital less than a year ago. Participating investors also include RET Ventures, Zigg Capital, Allegion Ventures and BoxGroup.
Kasa’s technology transforms vacant and underutilized real estate into flexible traveler accommodations. As of late, 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 full property potential.
“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 and 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.”
The hospitality industry could potentially lose $75 billion in the next 12 months as nearly half of US hotels are on the brink of permanent closure. The historic Martinique New York filed for Chapter 11 and the Omni Berkshire Place Hotel has closed after a nearly 95-year run. In addition, the 1,600-room Palmer House Hilton Hotel in Chicago was sued by lenders for falling into delinquency.
For the better part of a year, Kasa has grown rapidly despite these industry headwinds. Kasa has maintained occupancy rates of approximately 75% (more than double the hospitality industry average), expanded units under management by 50% and launched in five new cities. This increase in market share, together with monthly revenues climbing 50% since December, characterized a boost in Kasa’s valuation in connection with its most recent round.
“Our growing unit count signifies a need for flexibility in the world in uncertain times and the future is also uncertain,” Pedan tells GlobeSt.com. “We partner with large institutional multifamily owners to better manage vacancies in properties, whether it is for days, months or longer. There is a concern about long-term leases in cities with rising vacancies such as New York City and San Francisco, and we offer the ability to generate income in an otherwise scary moment.”
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. Despite historic hospitality industry lows, Kasa has maintained guest experiences at an affordable price points. Now, Kasa will redouble its efforts to streamline operations and minimize onsite overhead through features that focus on community safety, guest support and the 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 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.
“We selected Kasa as our short-term rental provider of choice after an exhaustive search,” said Lela Cirjakovic, executive vice president of operations at Waterton, a national multifamily owner and operator. “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 says guests can book through Expedia, Airbnb or Kasa.com. Kasa performs a background check, requires photo ID and a selfie photo, and offers contactless check-in and lower density occupancy.
“Safety and trust are focuses,” he tells GlobeSt.com. “There are decibel meters and THC/nicotine sensors in every room.”