Germany’s proptech Wunderflats raises $3.5 million
05 Dec 2017
Wunderflats, an Axel Springer-backed platform that brokers and manages furnished rental apartments in ten German cities, raised €3 million ($3.5 million U.S.) recently. Launched in 2015 in Berlin, Wunderflats is building a model around the “housing-as-a-service” trend and faces a row of competitors.
Taking part in the round were Creathor Venture, IBB Beteiligungsgesellschaft, Econa AG and unnamed family offices.
Wunderflats enables landlords to create listings for furnished apartments available for rent for at least one month. It advertises the flats on ImmobilienScout24 and other sites, provides landlords a free photography service, verifies renters, prepares the contract, and allows online payment. Contracts are signed between landlord and tenant. Listing on Wunderflats is free, and landlords pay a fee of 10 percent of the monthly rent for successful rentals.
The site claims to have 19,000 apartments online and more than 1,100 business clients, mainly large companies such as Google and Microsoft that book places for employees who are relocating or doing temporary assignments. Most apartments are in Berlin, Munich, Frankfurt and Hamburg, Germany’s largest cities.
Wunderflats co-founder Jan Hase (CEO), said (here) of the most recent funding round (in German), “we see housing-as-a-service as the future of this segment, meaning that everything around the home concept, including the apartment itself, becomes a service that’s just as easy to use as Netflix or car-sharing – whether you live in Berlin or Paris.
“Today, it’s furnished apartments with a cleaning service, but added to that will be laundry services, breakfast, and access to the nearest gym.”
The site will use the fresh capital for product innovation and further growth, he said.
Wunderflats claims revenue is growing 60 percent quarter-on-quarter, and that its paperless rental process leads to a 80-percent cost reduction per apartment for landlords.
The trend for furnished, “temporary” apartments in Germany is growing sharply. According to Wunderflats, the number of these apartments has doubled in the last four years.
A study (in German) by the Berlin Renters Association (Berliner Mieterverein) earlier this year showed that more than 40 percent of the city’s apartments posted for rent on real estate platforms were furnished.
Private landlords are attracted to offering their properties furnished, because they can get higher rents. Real estate developers are rushing into the market, too. An ApartmentService study for 2017 (in German) showed that Munich – the most popular city for furnished, temporary apartments – had 16 development projects with 3,600 new units planned over the next two years. That’s on top of the 5,500 serviced apartments already built in recent years.
Hase said in an interview in 2015, that the platform would scale beyond Germany to other European cities and “the world,” but it hasn’t happened yet.
This is likely due to stiff competition from platforms, such as Germany’s Homelike, which was founded around the same time, but has grown much faster. It claims to have 30,000 listings in 100 cities across four countries. In August, in its first major round, it bagged a €4-million ($4.7 million U.S.) investment from Cherry Ventures and Coparion. There’s also TempoFlat.de and numerous city-based services, such as Berlin99 and UrbanCocoon (focused on Berlin).
Let’s not forget Airbnb, either. It has made a strong push into the business travel space in recent years, working with corporate partners to arrange extended-stay accommodations as well as short-term travel bookings.
Wunderflats first received early-seed investments led by Axel Springer Digital Ventures in 2015 ($475,000) and 2016 (not disclosed). It started in the Microsoft Accelerator in Berlin in 2014.