Kayak Co-Leads Life House’s $ 60 Million Series C To ‘Reimagine’ The Hotel Experience – TechCrunch

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Life House, a boutique hotel brand that has designed software to help independent hotel owners and operators, has raised $ 60 million in a Series C funding round co-led by new investors Kayak and Inovia Capital.

Existing backers Tiger Global, Thayer Ventures, JLL, Trinity Ventures, Sound Ventures and Cooley LLP, among others, also participated in the funding, bringing the total raised by the company since its inception in 2017 to just over $ 100 million.

Rami Zeidan started Life House after nearly a decade of working in different areas of the hospitality industry. The New York-based company started out as an independent hotel brand and operator of hotels, developing its own software with the goal of becoming “the best operator.” Its aim was to mend “the broken and complex hotel operating model” before it morphed into a combination of technology provider, hotel manager and boutique hotel brand.

Today, the company announces that in addition to the capital increase, its software is “sufficiently complete and mature” to sell directly to hoteliers and global operators who wish to take ownership of on-site hotel management. With the move, Life House essentially went from a hotel operator with technology to a SaaS company (70 people).

“We have been quite efficient,” said CEO Zeidan. “Over the past four years, we’ve spent just over $ 20 million. Now we have three times that, so we’re excited about what that will translate to in terms of the product.

Founder and CEO Rami Zeidan. Image credits: Daniel Dorsa

It is remarkable that Kayak, one of the world’s largest travel sites, is one of its main investors. CEO Steve Hafner said his company plans to “reinvent the hotel experience” with Life House as its software and operational partner.

“Our investment will help accelerate the innovation and expansion of Kayak’s hotel initiatives,” said Hafner. “We share the vision that independent hotels can improve their operations and profitability through better technology. They also have a great team and top VC co-investors. Rami and his team combine hands-on operations with agile software development – it’s a great combination.

Life House currently manages the operations of nearly 50 hotels in North America. At the time of its $ 30 million Series B in January 2020, branded hotels made up around 50% of the startup’s portfolio. Today, around 85% of its portfolio is not under the Life House brand and instead consists of third-party hotels that use its software through a white label agreement.

“Now we are launching the sale of our SaaS products to third party hotels that we do not manage,” Zeidan told TechCrunch.

Its software over the years has “consistently” increased the profitability of its hotels by more than 200% and its net revenues by more than 45%, according to Zeidan.

Since the start of the COVID-19 pandemic, Life House has grown by over 600%. Simply put, the company’s mission is to serve as a one-stop-shop and enable anyone to own, build and operate any hotel of any shape or size and to do so “in a maximally cost-effective manner. “. He helps owners with things like revenue management and dynamic pricing, financial reporting and accounting, general operations, and branding and design.

“Hotels today are complicated to operate and they are primarily owned by individuals or companies as investment assets,” Zeidan told TechCrunch. “And so, the fundamental objective is to provide profitability and value to the financial asset of real estate. Our approach to solving this problem is extremely focused on profitability with the platform we are building, so everything we sell to hotels directly leads to improved profitability.

Image credits: House of Life

Life House is initially focusing on smaller hotels where it believes owners are particularly underserved and which account for almost half of the market, but intends to expand in time.

“We see a world where we ship iPads and we’re initially focusing on small hotels where we can grow quickly with minimal competition, but there’s no reason we can’t be the best fit for a hotel. of any size, ”Zeidan said. “Our software really cares about the customer experience and can be used in the most upscale hotels. It has now proven to be extremely useful regardless of the type of hotel.

Until now, the size of its hotels has ranged from 14 to 375 rooms. He runs a range of hotels – from a $ 2,000-a-night castle in the Berkshires to two motels in the Midwest.

The CEO believes that the fact that Life House is a user of its own software has been a big plus. “Building a lot of software in the hotel management ecosystem can take time,” he said. “But we had a very fast feedback loop that allows us to innovate very quickly. Plus, we really understand hotels and customers.

Much of the new capital will be used to hire, in particular, software developers, product specialists, engineers and to expand its business organization.

Inovia Associate Pranit Tukrel believes that while travelers are increasingly drawn to independent boutique and lifestyle hotels compared to unmarked branded hotels, minimal adoption of technology by these hotels has often resulted in them. at a disadvantage compared to their biggest competitors in terms of price, lead generation and cost management.

“There is a clear opportunity for Life House to manage these underserved independent hotels and deliver real economic benefit through its end-to-end technology suite,” Tukrel wrote via email. “Through its strategic real estate and distribution partners, LifeHouse is uniquely positioned to become the leader in independent small hotel management. Traditional managers such as Marriott and Hilton do not invest in this end market, as it is not as rewarding in public markets to try and gain shares with smaller independent hotels (50 keys) versus large ones. standardized properties.

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