European short-stay apartment rental marketplace, Bob W, secures $43M in funding

Bob W, a marketplace for premium short-term apartment rentals, has raised €40 million ($43 million) in a Series B round of funding.

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Founded out of Finland in 2018, Bob W touts itself as a “tech-enabled hospitality operator,” with some 3,000 “aparthotels” offered for rent in 17 cities across Europe including Amsterdam, Athens, London, Berlin, Madrid, and Helsinki.

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There’s no escaping the myriad incumbents that have long operated in Bob W’s space, from U.S. juggernauts such as Airbnb to Europe’s very own Booking.com. But there is a somewhat insatiable appetite for variations on the accommodation marketplace concept, including hybrid models that blend the benefits of an apartment with the lifestyle associated with that of a hotel.

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‘Best of both worlds’

This philosophy is actually where Bob W borrows its name from, as it’s a contraction of “best of both worlds.” But unlike the omnipresent Airbnb which allows anyone to list a spare room or property, Bob W pitches itself as a “full-stack hospitality operator and brand.” What this means is that it manages and operates the apartments itself through leasing and management agreements, and it takes care of the whole experience — with technology underpinning much of this to help keep staff overheads down.

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“Our technology enables us to scale like no other — we recently launched two properties in Amsterdam, totaling over 150 apartments in the city, with just four employees,” Bob W co-founder and CEO Niko Karstikko told TechCrunch. “Compared to a hotel, the number of staff is a small fraction.”

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In addition to dedicated apps for guests, cleaners, and operations, Bob W sports integrations with the “internet of things” (IoT) to allow it to remotely manage properties and gain insights into things like temperature, humidity, and even noise through decibel detection sensors.

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Guests are given codes via the app to access the property, while an in-app assistant (called “Bob W,” naturally) is on-hand to deal with issues remotely. On top of that, Bob W serves what it calls a “full-service digital marketplace” that connects guests with local businesses, such as bike rentals and gyms, and it can create a personalized package based on the guest’s profile and previous activities on the platform.

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“Our full-stack technology allows us to run a lovable full-service hospitality offering with significantly fewer on-site employees, at a practical ‘autonomous hospitality’ level,” Karstikko added.

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This model, whereby Bob W uses commercial over residential properties, also means that Bob W is largely immune to the growing array of regulations designed to counter the impact that short-term vacation rentals have on local communities.

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“The short-term rental regulations are mainly aimed at hosting in residential apartments,” Karstikko said. “We operate multi-unit assets that are intended for business use, in identical or comparable settings to hotels. As we always operate according to local legislation and zoning, we do not have the risks that are often associated with hosting in residential apartments.”

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There are other players out there with a similar hybrid proposition, such as Spain’s Ukio or Overmoon in the U.S. And each of these various platforms come with a slightly different value proposition and target market in mind, but the general idea is the same: here’s somewhere nice to stay with flexible terms, and it’s neither a hotel nor an apartment.

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Bob W, for its part, doesn’t really have an “ideal” duration for stays, and caters to anything from a few nights to several months. Karstikko says that more than half of its customers are individuals, however some 40% are actually B2B bookings where a company rents an apartment for work trips or temporary accommodation for employees relocating for a job.

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“Our typical B2B customers are next-gen companies, like tech scale-ups, startups, or from the creative industries,” Karstikko said.

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Suite profit

What is perhaps most interesting about the six-year-old company is its growth metrics. Karstikko says that they grew their revenues eight-fold in 2022 and tripled that again in 2023 — moreover, the company is profitable.

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“Despite three-times revenue growth in 2023, eight of our 10 markets (countries) were already highly profitable, with all markets combined being profitable already,” Karstikko said.

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Prior to now, Bob W had raised around €31 million, and with another €40 million in the bank, the company is well-financed to continue expanding into more cities across Europe — and longer term, maybe even beyond.

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“We continue entering into new strategic markets within urban centers across Europe, with our most recent launches in Copenhagen and Amsterdam,” Karstikko said. “We are also intensifying our presence in existing markets. While our current focus remains on Europe, there will be a point when we start to look beyond Europe.”

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Bob W’s Series B round was led by Evli Growth, with participation from Flashpoint, Supercell co-founder Mikko Kodisoja, and Taavet+Sten — the investment vehicle launched in 2021 by Wise co-founder Taavet Hinrikus and Teleport co-founder Sten Tamkivi.

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Reference: https://techcrunch.com/2024/02/12/bob-w-airbnb-like-raises-40-million-euros-premium-accommodation/