Frontdesk, a vacation rental platform that operates in 35 markets across the United States, has raised $7
million in a venture round led by Stormbreaker Ventures.
The Wisconsin-based company’s total funding
to date is $18 million, with the most recent round prior to this in
April 2020.
“When Stormbreaker approached
us this spring, we had the cash flow to grow in line with our lofty
expectations, but this preempted venture round gives us the ability to scale
exponentially. Given how strong the demand has been for our tech-enabled STR
platform, we saw more opportunity to grow than anticipated,” says Kyle
Weatherly, co-founder and CEO at Frontdesk.
“Ultimately, we decided to
'fuel the fire' and emerge from the pandemic as leaders in the booming
short-term rental space. The influx of capital will drive further growth to
both our management and our technology businesses, fulfilling the demand that
is in our lap with short-term stays now exceeding pre-pandemic numbers.”
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The company plans to continue
its aggressive growth plan, with an aim to double its portfolio before the end
of this year and turn profitable in 2022. Frontdesk has more than 250 employees
and hosts more than 15,000 travelers every month in its 160 locations across 35 markets.
The company says it will also
accelerate growth of its software business, Frontdesk Flex, which gives
professional short-term rental property managers a suite of white-labeled technology
solutions such as a property management system, direct booking engine, dynamic
pricing algorithm, access control, task management and more.
“Not only has Frontdesk
succeeded in achieving rapid scale, but they have done so in a way that is five
to ten times more capital-efficient than their peers, showing vastly superior
underlying unit economics,” says Said Mia, Stormbreaker Ventures’ managing partner.
“Sonder, for example,
required 35x more capital to achieve only 8x Frontdesk's scale; meanwhile,
other brands have raised $50 million-plus with less scale than Frontdesk. As a
result, we’re confident in the company’s ability to fundamentally change the
way consumers live, work and travel in a post-pandemic era, with their
capital-light and tech-forward model.”