Germany: Berlin-based hospitality startup Cosi Group, which provides an alternative offering to short-term rental apartments and boutique hotels, has secured €20 million in investment to fund its European expansion plans.
The round has been led by Vienna-based real estate development firm Soravia, as well as venture capital companies and existing investors, Cherry Ventures, e.ventures, Kreos Capital and Bremke.
Cosi, which has 750 units under contract and is negotiating for a further 1,500 units, is planning to use the funding injection to accelerate its expansion in Europe, launch a new brand and create a “new strategic business unit”, according to CEO Christian Gaiser.
The startup specialises in catering to mid-term rental guests [staying for a month and over], such as temporarily relocated families and people that have recently moved to a city seeking temporary accommodation before finding a longer-term apartment to live in. It works by signing long-term leases with property owners and furnishing the apartments themselves.
Gaiser, who founded local shopping platform Bonial.com before selling it to Axel Springer in 2011, claims that Cosi observed an accelerated shift towards private individual apartment-style accommodations away from hotel spaces, which led to the startup achieving 90+ per cent occupancy during the pandemic.
He added that due to the underperformance of hotel spaces, the startup had received offers to convert office space into mid-term rental units.
Speaking in an interview with TechCrunch, Gaiser said: “On the back of our strong Covid performance, we’ve built a lot of trust among the real estate community and receive more and more offers. Prices for supply have fallen sometimes dramatically, depending on the city, due to these factors.
“Now is exactly the right timing to double down on Cosi’s growth from a long-term perspective. When everyone is scared / shocked, you can win big if you have a clear plan.
“Our investors bought into this plan, as we have demonstrated that our business model is resilient and we also have the capacity to navigate the ship both in good but also in rough waters,” he added.
Cosi secured €5 million in a seed funding pre-launch back in August 2019, with the aim of eventually competing with major hotel brands such as Marriott and Hilton in business travel. Its business model converged with US firms such as Sonder and Lyric, which were then operating under similar master lease agreements.