Business News first on FIR:
NEW YORK–()–Life House, a tech-enabled lifestyle hotel company, announced the closing of a $30 million Series B fundraise. The investment was led by leading travel-tech investors, Thayer Ventures, with Tiger Global, JLL Spark, and Ashton Kutcher & Guy Oseary’s Sound Ventures among others. Several strategic investors also participated in the round, including the former Chairman of Morgans Hotel Group, David Hamamoto, and Jim Ketai – the Founder of Bedrock Detroit – the owner of Detroit’s Shinola Hotel. The round also included follow-on investments from the company’s prior investors Global Founders Capital, Comcast Ventures & Trinity Ventures.
Life House was founded by luxury boutique hotel veterans and has rebuilt the complex hotel tech stack from the ground up to create a completely new operational model that allows them to deliver award-winning lifestyle boutique hotels at a fraction of the price to travelers.
After a successful launch, Life House is quickly becoming one of the fastest-growing hotel brands and management companies in North America, with over 800 beds today and 25 hotels expected to be open and operating by early next year. Despite its scale, the Company has only 30 corporate employees, which evidences it’s venture-backable business model.
The Company is performing very well with its platform driving over 40% increases in revenue, reducing operating costs as much as 45% and achieving over 65% of its bookings direct on its website. Real estate owners have taken notice and the Company has already secured hundreds of millions of third party real estate capital to continue fueling its asset-light growth. In addition to its growth, Life House is already profitable at the unit-level and with this new financing, the Company is poised to grow into new markets, launch new brands in other consumer price segments, continue to innovate to build sustainable competitive advantages, and to reach corporate profitability in the next 18-24 months.
“The hotel industry is broken, leaving hotel owners with painfully unprofitable hotels and travelers with expensive or suboptimal hotel experiences,” said Founder & CEO, Rami Zeidan, who had seen this first hand after a seasoned career in the industry. “Most of these problems are solved with software, while others are solved with innovation in the supply chain of our services.”
In 2018, after nearly a decade of working for some of the best hotel brands, Founder & CEO, Rami Zeidan, launched Life House to fix the broken and complex hotel operational model through software innovation and through the creation of authentically-local lifestyle hotel brands that scale without brand dilution.
The Company successfully launched with two primary products – an accessibly-priced 4-star hotel brand called “Life House” and a white-labeled software-driven management platform that has been driving over 30-40% increases in profitability to its owners without a re-branding or renovation. In terms of software, the Company has already built and launched several proprietary software applications including an automated financial accounting & reporting, an automated, algorithmic, & machine learning-driven pricing system, and an employee facing property management system, among others.
Life House is also transforming accommodation options for families and groups of friends with its luxury bunk beds. Zeidan’s experience at Freehand led him to design a luxury bunk (as dubbed by Conde Nast Traveler) with full-size mattresses and stairs that comfortably sleeps a group of four adults while still offering luxury linens, room service, Le Labo bath products, and on-site community & bar & restaurant, all at a fraction of the price of even an Airbnb. After a successful debut, the brand is opening another six hotels with luxury bunks this spring in 3 new neighborhoods in Denver, Nantucket, and Tennessee.
Launching an asset-light hotel brand and management company is complex, multi-faceted, and has high barriers to entry. More than its supply growth, what really sets Life House apart is its ability to have built its vertically-integrated business a little over a year and with less than $9 million of venture funding, manifesting its uniquely asset-light and venture-backable business model, which induced the significantly oversubscribed investor demand for this round.
“We, like many other investors, were immediately enamored with the Company and team that Rami has built,” said Chris Hemmeter, a Managing Partner at Thayer Ventures. “Our connections and LP-base in the hotel space are deeply rooted and after a thorough vetting, we became even more excited. We’re very excited to be partnering with Rami and his team and we’re pleased that they recognized our value-add and selected us to lead at the prudent terms we offered.”
In addition to it’s beautiful spaces, the Company has designed a brand & product that is very scalable with its latest hotel implementation taking less than 2 weeks and its latest branded hotel – Life House, Collins Park – having undergone a complete renovation in less than 90 days. “We’ve been extremely impressed with the Life House team’s ability to immediately add value to the hotels we have acquired and completely transform a hotel in such a short amount of time,” said Jason Brown of Blue Flag Capital, the owner of two Life House hotels and an investor in the Company.
“We are excited to continue our support of Life House as it expands its portfolio of boutique hotel properties that leverage technology to deliver aspirational travel experiences at affordable prices. Rami’s deep expertise in the hospitality industry gives him a unique perspective on how to modernize travel for guests and property owners alike” said Patricia Nakache, General Partner at Trinity Ventures.
The Company is initially focused on small hotels where owners are particularly underserved, and which represents nearly half of the entire market, but has plans to grow out of that in good time. “There’s no reason why we can’t eventually be the best solution for any sized hotel in the near future,” said Zeidan. Currently, the company’s largest hotel is 132 rooms, with larger projects in the pipeline.
“Life House is an excellent addition to JLL Spark’s portfolio, offering authentic travel experiences to hotels and their guests and using software to reduce the costs of the operation,” said Kitty Sullivan, of JLL Spark. “The Life House team is incredibly impressive and its scalable, asset-light strategy is poised to sustainably bring new value – and new levels of profitability – to the hotel industry.”
About Life House
Life House is a New York-based, venture-backed & vertically-integrated hotel brand, management, and software company. Life House has built a proprietary technology stack to power a platform that makes hotels more seamless and more profitable for hotel owners and travel more meaningful and more accessible for travelers. For more information on Life House, visit https://www.lifehousehotels.com/.
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