Short term rental start-up Casai announced it has raised $23 million in equity funding. Casai operates 200 short term rentals or “boutique travel apartments” in Mexico City with hotel-style amenities, such as contactless and keyless entry, smart TVs, and high-speed Wi-Fi.
The funding comes from major investors such as Andreessen Horowitz, who led the round, and Kaszek Ventures, Latin America’s largest venture fund. It also has access to $25 million in debt financing from TriplePoint Capital.
Casai’s business model is similar to the professional short term rental brands in the U.S. and Europe. While some of the ventured-backed professional managers, such as Lyrics and Zesus Living, have struggled from the travel shutdown, others like Sonder raised $200 million in new funding in June.
The brand is founded by Nico Barawid, CEO, and María del Carmen Herrerías Salazar, COO, who had worked at Grupo Presidente, one of Mexico’s largest hospitality companies.
According to Skift, Casai differentiates itself from some of the U.S. short term rental brands in several ways:
- “It offers a reception lounge. Guests can base themselves in the lounge ahead of check-in or after check-out to take work-related calls or ask any questions of a concierge.”
- Display contemporary Mexican art and design bought from local artists. “We want our guests to understand the artisanal pieces in our apartments,” said Barawid. “We include QR codes in the room so guests can find out more about the artists behind the works.”
- “Casai mainly has hubs with many units bunched together within the same buildings. But a non-trivial portion of its portfolio is individual units or small clusters distributed inside distinctive buildings in popular neighbors.”
- “The company relies on data-driven digital advertising. It studies demand signals, such as where inbound flights are coming from under new schedules, and uses those insights to inform how it buys online ads.”
- The pandemic has transformed Casai’s guest demographic from mainly international business travelers to domestic leisure and staycation travelers. Its business has rebounded with occupancy at around 80%.
What Makes Casai Attractive to Investors? The Latin American Opportunity
Latin America tourism was booming before the pandemic and Mexico is one of the world’s largest tourism markets. Yet, there is a dearth of hospitality properties in the mid-price range, between the $300 per night business hotels and the lowered quality short term rentals at $60-$80 per night, according to Barawid.
With its curated, thoughtfully designed luxury rentals in desirable neighborhoods, Barawid thinks Casai can charge hotel rates while “running cost-effectively like a short-term rental.”
Casai also plans to take advantage of the currency arbitrage between “guests [that] tend to pay in dollars…[and] hotels [that] pay operating costs in Latin American currencies.”
Founded in 2019, Casai will use the funding to expand to other Mexican cities and abroad, starting with São Paulo, Brazil.
photo credit: casai