San Francisco-based housing startup Bungalow Living, is reportedly close to raising an additional $30m-$40m of equity capital to expand its business of leasing rooms in single-family homes to young professionals.
One of the tech industry’s most prominent investment firms is backing Bungalow Living’s plans, even though its selective accommodation program is struggling for traction.
Bloomberg says a host of startups have sought to build residential housing’s answer to office giant WeWork, a modern property manager that offers flexible leases and a friendly atmosphere for residents.
Venture capitalists were slow to realise what turned out to be the vast potential of WeWork and are making sure they do not make the same mistake with Bungalow Living even allowing for the uncertainty of the sector.
Bungalow and other startups in the so-called co-living sector, including Common, Starcity, Ollie and HubHaus, have not attracted the same level of venture capital as co-working companies. And so far, none has created a well-known brand.
Other venture-backed firms in the sector have either gone out of business or are struggling.
Bungalow offers residents, who are typically in their 20s, the chance to live in furnished apartments, have a tech-savvy property manager and sign leases as short as four months.
Bungalow operates about 650 properties in cities including Chicago, Los Angeles and New York. Its website says it has more than 2,000 members.
WeWork itself has struggled to grow its co-living division, WeLive, which has just two locations.