Life house, a boutique Hotel brand, which has developed software to help independent hotel owners and operators, has raised $ 60 million in a Series C funding round jointly led by new investors Kayak and Inovia Capital.

The existing donors Tiger Global, Thayer Ventures, JLL, Trinity Ventures, Sound Ventures and Cooley LLP also participated in the financing.

Rami Zeidan founded Life House after having worked in various areas of the hospitality industry for nearly a decade. The New York-based company started out as a hotel brand and operator for independent hotels and developed its own software to become “the best operator”. His goal was to fix “the broken and complex hotel operating model” before it became 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 “comprehensive and mature enough” to sell directly to global hoteliers and operators who wish to own on-site hotel management. With the move, Life House has essentially developed from a technology-oriented hotel operator to a (70-person) SaaS company.

“We were pretty efficient,” said CEO Zeidan. “In the past four years, we’ve spent a little over $ 20 million. Now we have three times as much, so we are excited to see what will result from this in terms of the product. “

Founder and CEO Rami Zeidan. Credit: Daniel Dorsa

Noteworthy is the fact that Kayak, one of the largest travel websites in the world, is one of its main investors. CEO Steve Hafner said his company plans to “reshape the hotel experience” with Life House as its software and operations 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 operations and profitability through better technology – they also have a great team and high-level VC co-investors. Rami and his team combine hands-on operations with agile software development – a great combination. “

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

“Now we’re starting to sell our SaaS products to third-party hotels that we don’t manage,” Zeidan told TechCrunch.

According to Zeidan, his software has “consistently” increased the profitability of his hotels by over 200% and net sales by over 45% over the years.

Since the beginning of the COVID-19 pandemic, Life House has grown by over 600%. Put simply, the company’s mission is to act as a one-stop shop, making it easy for everyone to own, build and operate hotels of all shapes and sizes, and do it “as profitably as possible”. It 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 are essentially owned by individuals or companies as fixed assets,” Zeidan told TechCrunch. “So the basic goal is to bring profitability and value to the financial asset of the property. Our approach to solving this problem is extremely profitable with the platform we are building, so whatever we sell to hotels translates directly into profitability improvements. “

Credit: Life house

Life House is initially focusing on small hotels, which it believes the owners are particularly underserved and which make up almost half of the market, but plans to grow out of them in time.

“We are seeing a world where we ship iPads and we are initially focusing on small hotels where we can grow quickly with minimal competition, but there is no reason why we cannot ultimately be the best solution for hotels of all sizes “Said Zeidan” Our software really cares about the guest experience and can be used in the most luxurious hotels. It has now proven to be extremely helpful, no matter what type of hotel it is. “

So far, the hotels ranged in size from 14 rooms to 375 rooms. It manages a range of hotels – from a $ 2,000-night castle in the Berkshires to two motels in the Midwest.

The CEO sees the fact that Life House was a user of its own software as a great advantage. “It can take time to develop a lot of software in the hotel management ecosystem,” he said. “But we had a very fast feedback loop that enables us to develop innovations very quickly. We also really understand hotels and guests. “

The new capital will mainly be used for the hiring of software developers, product employees, engineers and the establishment of the sales organization.

Inovia Associate Pranit Tukrel believes that while travelers are increasingly attracted to boutique and lifestyle independent hotels compared to standard branded hotels, the minimal technology adoption of such hotels often has them when compared to their larger competitors in terms of pricing and Disadvantaged lead generation and expense management.

“There is a clear opportunity for Life House to manage these underserved independent hotels and get real economic value through its end-to-end technology suite,” Tukrel wrote via email. “Thanks to its strategic real estate and distribution partners, LifeHouse has a unique position to become the market leader in the field of small independent hotel management. Traditional managers like Marriott and Hilton do not invest in this end market because in the public markets it is not as worthwhile to try to gain market share with smaller (50 key) independent hotels compared to large standardized properties. “

RELATED ARTICLESMORE FROM AUTHOR