Blueground, the rental startup forced during the pandemic to scale back expansion plans, raised $140 million in Series C equity financing and $40 million of debt, valuing the company at $750 million.
Existing investor Laurence Tosi’s WestCap Group led the round, which included billionaire Geolo Capital, John Pritzker’s family office, as well asPrime Ventures and VentureFriends. The debt came from Silicon Valley Bank. Bloomberg, which reported the round earlier, cited people familiar with the deal for the valuation.
The pandemic ravaged markets in cities where Blueground operates such as New York and San Francisco, prompting the firm to rethink expansion plans. It now aims to have 30,000 units by 2025, compared with 50,00 by 2023, CEO Alex Chatzieleftheriou said in an interview today. The company has 5,000 apartments now, up from 2,800 in 2019.
“We did adjust our business quite significantly,” he said.
New York-based Blueground, which offers furnished and serviced rentals for a minimum of one month, also lowered rates and started offering incentives such as rental agreements that allowed people to move between cities and a $1,000 credit for a second meeting, with a six-month minimum, Chatzieleftheriou said.
Its global occupancy rate sank to a low of 88 percent last year before climbing back to 94 percent this month as remote work became the norm. It still intends to enter markets including Miami, Madrid, Zurich and Berlin. Chatzieleftheriou said remote work will increase the market for his serviced units.
“Flexibility will be key,” he said. “The pandemic accelerated the trends that Blueground was relying on.”