Blueground, a premium furnished rental apartments service founded in Athens, Greece, raised $180 million to fund its expansion into new markets and accelerate its business growth as demand for flexible rentals rises in the post-Covid era.
The rental start-up, which is based in New York and entered the Dubai market in 2016, offers more than 5,000 apartments in 15 cities globally. It plans to expand to 50 cities by 2025.
In its latest funding round, also known as Series C funding, Blueground raised $140m in equity financing led by the US investor WestCap. Private equity investment company Geolo Capital and venture capital firms VentureFriends and Prime Ventures also participated in the round.
Blueground also raised a $40m debt facility from Silicon Valley Bank in California.
“With the new living and working paradigm, we are ideally positioned to meet people’s increasing demands for greater flexibility. We are incredibly excited about the vast growth potential, which will be accelerated by this latest round of funding,” said Alex Chatzieleftheriou, chief executive and co-founder of Blueground.
Together with this new round, the start-up has raised a total of $258m since its inception. It expects to earn revenues of $140m this year.
Blueground is currently valued at $750m, according to a Bloomberg report. It is different from short-term rental services companies, such as Airbnb, because it requires a minimum stay of one month, up to a year or longer. It leases apartments from landlords and asset management companies for one to three years.
Catering to business travellers and remote workers, Blueground offers high-end apartments that are fully furnished and equipped with technology, such as high-speed Wi-Fi and smart TVs. Guests also have access to support through the Blueground app, with services such as cleaning and maintenance. They can choose to relocate to a different neighbourhood or city with a notice period of 15 days to a month.
“Blueground curates and hand picks all its apartments and ensures they are of high quality,” the company said.
In Dubai, Blueground focuses on properties in popular neighbourhoods, such as Downtown, Dubai Marina, City Walk and Dubai International Financial Centre.
With more companies adopting hybrid work models, it is normal for employees to work from anywhere, resulting in an increase in demand for flexible, long-term accommodation.
Last year, as countries enforced strict quarantine measures, Blueground was able to maintain 92 per cent occupancy for its units. It has added 1,400 new units in the past 18 months.
"Blueground is uniquely positioned to address the growing need for flexibility in real estate as companies continue to delay return-to-office mandates," said John Pritzker, Geolo Capital's founding partner and director.
"There is an immense opportunity here … with Blueground team as the clear leaders in 30+ days stays, we are confident that Blueground will continue to see success," he said.
Currently, Blueground is present in Dubai, Istanbul, Paris, London, Vienna and Athens, besides the US cities of New York, Los Angeles, San Francisco, Boston, Chicago, Washington, Denver, Seattle and Austin.