Blueground will soon purchase the startup, ten months after leading Tabas’ $14 million Series A funding round earlier this year. Tabas is the largest operator of designer-quality furnished apartments for 30 days or more in São Paulo, Rio de Janeiro and Brasilia.
The acquisition, which is expected to close early in the first quarter of 2023, will enable Blueground to enter the Latin American market and fuel the increased demand for furnished, flexible rentals in the region. Together, Blueground and Tabas will launch in Mexico City in early 2023.
In the period leading up to the closure of the transaction, the two companies will continue to operate independently and will gradually integrate over the next year. The combined organisation will have a presence in 29 cities across 16 countries, employing more than 1,000 people.
Based on current financial projections, the joint entity is projected to generate circa $650 million in 2023.
Considered to be one of the largest turnkey property rental companies in the 30+ day sector, Blueground has a network of 9,500 move-in-ready, expertly-designed homes enabling people to flexibly live wherever they choose.
The company was co-founded by CEO Alex Chatzieleftheriou in 2013, who, after many years as a business consultant, had experienced first-hand the pain points of living out of hotels for work for months at a time. He aspired to create a seamless way for people to freely move between neighbourhoods, cities, and countries around the world.
Blueground currently works with more than 4,700 landlords globally, providing them with rental income, expert property management and maintenance services at scale. The acquisition of Tabas will allow Blueground to grow its network faster, support its goal of reaching 40,000 apartments across 50 cities by 2025, and add more location options for its client base.
Alex Chatzieleftheriou, co-founder and CEO of Blueground, said: “We’ve had our sights set on Latin America for quite some time, as we see huge market potential for furnished and flexible rentals. Since our first investment in Tabas last year, we’ve developed immense respect for the Tabas team and what they’ve built in Brazil.
“With our best-in-class technology and our expertise in scaling the business, we’ll continue to expand and offer the option for a flexible lifestyle in more markets globally,” he added.
Last September, Blueground also raised $180 million in Series C funding, including $140 million in equity funding, from investors headed up by WestCap Group managing partner Laurence Tosi, giving the company a reported valuation of $750 million.
Founded in May 2020, Tabas was born out of the founders’ frustration with the lack of flexible, fully furnished rentals for mid- to long-term stays. Tabas now has over 1,000 apartments in three cities in Brazil – São Paulo, Rio de Janeiro, and Brasilia, raising over $20 million in funding prior to the acquisition.
As the first project post-acquisition, Tabas will offer its knowledge and understanding of the market to support the launch of Blueground in Mexico City in early 2023, marking Blueground’s 30th city, and 11th in the last 12 months.
Leonardo Morgatto, co-founder and CEO of Tabas, said: “Tabas and Blueground’s visions are fully aligned and together we can create even more value for our guests, our landlords and the Tabas team. This acquisition is yet another success story for Brazilian proptech companies.
“We’re proud of the work we’ve done to get us this far; now it’s time to take it to the next level and continue bringing the turn-key, flexible rental living concept across Latin America,” he added.
The pandemic gave rise to new work environments, enabling people to explore the world and forgo traditional long-term leases for flexible rentals. To keep up with the growing demand, Blueground claims to have doubled its supply of apartments in the last year.
The acquisition is subject to standard closing conditions, including regulatory approvals.