US: Travel apartment startup The Guild has secured $25 million in a Series B funding round as the company seeks to continue its expansion this year and in 2021.
Venture firms Maveron, Convivialite Ventures and ATX Venture Partners participated in the round, as well as Nicol Investment Group and RXR Realty. The latter teamed up with Airbnb last year to allow it to operate units at the Rockefeller Center in New York.
The investment follows a previous round, also led by Maveron, in 2018, which saw The Guild pick up $8.5 million in funding.
With this latest funding, The Guild says it aims to expand to six more markets by 2021, having already established its presence of 800 units in Austin, Cincinnati, Dallas, Denver, Miami and Nashville. The startup will furthermore look to develop its technological capabilities in order to enhance the overall guest experience.
The business launched in 2016 when it was co-founded by boutique hotel developer Brian Carrico and his business partner, Chris Herndon.
Its business model caters principally to business travellers as it partners with developers of luxury apartments and office buildings in cities and leases them to allow it to convert entire floors into branded short-term rental suites. It essentially wants to provide a divergent offering to that of hotels and other branded short-term rental providers with luxury corporate apartments.
Its fixed nightly rates are believed to range between $150 and $250, according to Skift.
The Guild claims to offer an experience akin to hotels, with concierge systems in place and housekeeping services available. Guests can also access a number of facilities such as pools and gyms and amenities including high-speed wi-fi, kitchens, washers and dryers, to match the needs of business travellers on the move.
However, the startup faces stiff competition from similar apartment operators that aim to provide hybrid hotel / short-term rental offerings, many of whom have generated significantly higher funds in rounds thus far in their development.
One such rival is Sonder, which has received more than $360 million in funding in total since launching in 2015 and now operates a reported 8,500 units in 26 cities worldwide.
Another large market player is Lyric, which secured $160 million in a Series B funding round with Airbnb in 2019.
The likes of Domio and Stay Alfred also operate in the same space and have similar growth ambitions in the US.
Speaking to Skift, Carrico said he was not overly concerned about the startup’s funding plans compared to its main rivals, adding that their strategy was to “grow at a measured pace that allows us to keep improving the guest experience and keep adding new locations that guests want”.
Jason Stoffer of Maveron echoed Carrico’s words and said that the alternative accommodations space is ripe for growth over the coming years.
Stoffer told Skift: “There’s an incredible amount of demand for alternative types of accommodations that feel more like a home, that are different than what hotels offer. You’re also facing a lot of constraints with Airbnb with inconsistencies of experience and regulatory pushback.
“It doesn’t take a lot to close your eyes and say 20 per cent of the global hospitality industry, maybe more, will have the look and feel to it of a non-traditional hotel,” he added.
Looking ahead, The Guild is targeting the cities of Boston, Chicago, Los Angeles, Seattle and Washington as key growth areas in its expansion strategy.
For more information, visit The Guild website here.