Generation Start-up: Dubai PropTech aims for an experience as 'smooth' as silk

Technology is powering the rentals market, which, Silkhaus believes, is becoming an asset class for real estate investors and a preferred hospitality experience for diverse groups of travellers

Aahan Bhojani and Ashmin Varma, both seated centre, with their team at property technology start-up Silkhaus. Photo: Silkhaus

It is often said that experience is the best teacher. That could not have been more true for Aahan Bhojani, who now strives to make sure others won't have to learn their lessons the hard way.

As a strategy consultant years ago, Mr Bhojani was required to travel a lot to deal with corporate matters. Coupled with his own personal trips, it was during these times that he consistently noticed a gaping hole in the travel experience.

“I realised there was something broken about the long-stay travel experience,” Mr Bhojani, the founder and chief executive of Silkhaus, tells The National.

“Finding suitable long-term accommodation options on online travel aggregators was like pulling a needle out of a haystack.”

It was a challenge the Harvard Business School and Yale College graduate decided to take head-on by establishing Silkhaus, along with Ashmin Varma, who is the company's chief operating officer.

And its name signals the obvious — to convert any tedious experience into one that is as “smooth as silk”.

But there is a deeper meaning to the name other than the oft-quoted idiom: while silk is a material that is “universal to many geographies, each region has a different variant of silk”, Mr Bhojani says.

“This was true of the type of property management model that we want to pioneer — to bring global standards to this space with the uniquely local context of each location that we are in.”

Describing itself as a “technology-first hospitality brand”, Dubai-based Silkhaus, whose holding company is within the Abu Dhabi Global Market, aims to “empower immersive nomadic experiences by providing business and leisure travellers with a home away from home”.

At the same time, Mr Bhojani says short-term rentals are becoming an asset class for property investors globally, and a preferred hospitality experience for diverse groups of travellers.

“The space is hugely growing, newly emerging and hyper-fragmented. This is what I saw an opportunity in,” he says.

A fragmented market is one where there are many competitors but no single company has a distinct advantage over the rest.

PropTech is the application of technology in the real estate industry, encompassing anything from property management and bookings to construction and analytics, largely accessible using a mobile app.

It can also offer sustainable solutions to optimise operational efficiencies, enhance shopping mall experiences and digitalise property development, residential communities and hotel spaces.

The global PropTech market is projected to grow to $86.5 billion in 2032, from $18.2 billion this year, at a compound annual rate of about 17 per cent, according to Future Market Insights data.

Meanwhile, the short-term rental market has grown exponentially as people increasingly seek more flexible and budget-friendly accommodation, especially with “staycations” becoming popular, largely thanks to Airbnb, which popularised the online marketplace for short-term stays.

The rising trend of global nomads, or professionals who work from anywhere, has also driven up demand for such properties.

The global short-term holiday rental market is projected to hit more than $256 billion by 2030, from about $100 billion in 2021, at a compound annual growth rate of 11.1 per cent, according to Grand View Research.

However, venture capital investments in PropTech companies have declined by 38 per cent to $19.8 billion this year, from a record-setting $32 billion in 2021, making 2022 the second-lowest investment year since 2018, according to data from the New York-based Centre for Real Estate Technology and Innovation.

The real estate macro environment is dictating the PropTech industry's narrative, and realty companies have become more cautious as they carefully navigate an economic landscape that has been hit by high interest rates, market volatility and recession worries, the centre says.

Deal volume has been down, with late-stage deals dropping off significantly due to a lack of mega-rounds, or those worth $100 million and above, it says.

Despite these worries in the global market, Silkhaus was able to raise $7.75 million in a seed round last month that it says makes it “well positioned” to put in place its business and expansion strategy in the medium term, as well as contribute to boosting its portfolio of investors, Mr Bhojani says.

“Aside from investors purchasing real estate, we have seen a growing interest in the resident population seeking to reside in the UAE. The need for a 'landing pad' to accommodate incoming audiences has never been stronger,” he told The National at the time.

There has been a blurring of the lines between short, medium and long-term travel, in parallel with that in the business and leisure travel segment, Mr Bhojani says.

Travellers are increasingly more interested in short-term rentals, focusing instead on alternative accommodation with an immersive experience on top of their list.

This, in turn, is a boon for accommodation providers, who have become increasingly competitive to attract guests and provide that experience they look forward to, as well as the convenience travellers may require.

“I have understood how big an asset class it can be for owners if they take their residential real estate and activate commercial-style yields. We have done that with the help of technology,” Mr Bhojani says.

Light bulb moments

Two light bulb moments lit up Mr Bhojani's quest to enter the PropTech sector. The first was when he joined travel technology start-up in Boston to lead its product team, building software to help small and medium enterprises book and manage travel experiences and expenses.

“It was here that I began to see businesses of all sizes starting to book alternative accommodation formats like short-term rentals, rather than hotels,” he says.

The second happened in Dubai, but right at the moment the Covid-19 pandemic hit the world in March 2020.

What was intended to be holiday became a months-long stay, leaving a long-term lease he had signed in Boston that he could not extricate himself from as borders were locked down.

This eventually led to a decision to relocate to the emirate.

“I felt that residential real estate [in Boston] had failed me as a modern consumer. My lifestyle was such that I split the year across multiple locations,” he says.

That rather unpleasant experience was a blessing in disguise: his arrival in Dubai created more opportunities for him, including building a network of K12 schools in the UAE.

And his “solid understanding of how to launch and scale operating businesses in emerging markets” is one of the key factors that has guided Silkhaus.

The company has grown more than 10 times in the past 12 months in both scale and revenue, Mr Bhojani says.

While the start-up does not disclose numbers on its revenue and customers, it is “actively working with some of the largest global corporations on global relocation and 'living as a service' for corporates”.

Plans are also afoot to expand into cities across the GCC, South Asia and South-East Asia.

“We are well capitalised with our seed round to grow and have brought together the strongest capital partners globally to scale [up] our platform,” he says.

“As consumer experiences have been uplifted, smoothened and accelerated through the use of data and technology, players in the real estate industry — be it property owners, tenants, landlords, brokers or financiers — have acknowledged the value of technology in enhancing customer experiences.”

Q&A with Aahan Bhojani, co-founder and chief executive of Silkhaus

If you weren’t into PropTech, which industry would you be in?

I love newly emerged and hyper-fragmented industries that have yet to experience the true impact of technology. As a generalist, there are many interesting industries to build incredible businesses in.

What is the biggest challenge you have faced and feat you have achieved?

The start of building a new venture, when you are playing every role. I was driving technology, sales, finance, human resources, procurement and every function. While this was the greatest challenge, it was also the most enjoyable moment — and the only time where you have 360-degree visibility into every aspect of a business.

What do you do in your free time?

I love to travel, and as an avid foodie, I often plan my travels around the cuisines and restaurants I can experience. In my free time, I thoroughly enjoy tennis.

What were your start-up's growing pains and what advice can you give to budding entrepreneurs?

Starting up — identifying a problem and understanding whether you can commit the next decade to solving this problem — is the hardest part of starting up. My advice would be to really spend time thinking through whether the problem in front of you is what you want to dedicate the next decade to. Founder-market fit and founder-idea fit are the most important drivers of the passion to build a disruptive business.

If you weren’t into PropTech, which industry would you have been into?

I love newly emerged and hyper-fragmented industries that have yet to experience the true impact of technology. As a generalist, there are many interesting industries to build incredible businesses in.