Bungalow, a communal-living startup that targets high-rent cities in the U.S., has scored a $75 million funding round, bringing its valuation to $600 million.
Investment firm Deer Park Road led the round with participation from previous investors including Atomic, Founders Fund, Coatue and Khosla Ventures, according to a company statement. Total funding to date exceeds $150 million.
Bungalow has been described as an I-Renter, similar to IBuyers such as Opendoor and Offerpad, except that it rents or leases homes and then sublets them to tenants.
Initially, the firm focused on co-living arrangements: it would lease single-family homes, make them suitable as shared spaces for multiple tenants, and then market them to individuals.
Recently, the firm has added the option to allow an individual or family to sublease an entire home.
The company says it caters to home owners and investors, and claims it can bring them up to 50% more net operating income on their properties in comparison to traditional property management systems.
The firm apparently hit hard times during the pandemic as a wave of urban dwellers sought less cramped, more affordable locations during lockdowns. But many are returning to cities.
Traffic to Bungalow’s site during the last quarter jumped 108% versus Q2 2020 and has surpassed pre-Covid levels in 2019 by more than 40%, the company stated.
Bungalow said prices are rebounding in all of its key markets, which include the biggest cities in the country as well as major technology hubs such as Seattle; Portland, Oregon; and Austin, Texas.
Roommate chat volume, connecting potential renters with current housemates, more than doubled from March 2021 to June 2021, Bungalow stated.
“As you might imagine, the rental market was one of the most impacted sectors of residential real estate during the pandemic and I fully credit the strength of our team and our platform in positioning Bungalow for a stronger comeback than I could have imagined possible,” Bungalow co-founder and CEO Andrew Collins wrote in the funding announcement. “As we re-emerge and recover from a global crisis, this infusion of capital puts us in a very strong financial position to capture both homeowner and resident demand.”
Founded in 2017, Bungalow operates in 16 metro markets, housing more than 3,000 tenants in over 700 homes. The company plans to open in five more markets by the end of this year: Miami, Tampa, Atlanta, Houston and Phoenix.