The Guild, a real estate startup focused on corporate travel, has raised $25 million to expand its national footprint and further its tech offerings.
The round, announced Monday, brings the company’s total haul to $32 million since 2016. Participants included venture firms Maveron, Convivialite Ventures and ATX Venture Partners as well as RXR Realty, Corigin and Nivol Investment Group.
A cross between a corporate-stay hotel and Airbnb, The Guild partners with developers of Class A apartment and office properties, and converts full floors into hotel suites. It bills itself as an asset-lite alternative to some of its peers, however, by forming partnerships with landlords who front the capital for improvements in exchange for a share of the revenue. Overnight stays range from $150 to $250.
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Founded three years ago by Brian Carrico, a hotel developer, and Chris Herndon, a tech entrepreneur, The Guild currently has a portfolio of 800 units in Austin, Cincinnati, Dallas, Denver, Miami and Nashville. (It’s planning to launch in Los Angeles, Boston and Philadelphia and anticipates being in 12 markets by 2021.)
With the latest round, Herndon said The Guild will expand geographically and invest in its tech — which includes tools that free up staff from manual tasks like dispensing keys and processing reservations. By taking advantage of key-dispensing kiosks and virtual check-ins, the staff is trained to focus on personalized services — like stocking a guest’s refrigerator with local beer or decorating a guest suite for Christmas, Herndon said.
But in the wake of WeWork’s botched IPO, however, company execs insist they are taking a more careful approach to growth. In a press release announcing the funding, the company said it has eschewed the grow-at-all costs approach of its peers, which include $10 billion SoftBank-funded hotel startup Oyo.
“The Guild seeks to avoid the well-documented pitfalls of hyper-growth startups such as WeWork and Uber,” the statement said.
Herndon said it’s an important differentiator for landlords.
“By playing the long game, we think we can build a very substantial company while staying true to our values of delivering a great experience to our guest but also doing it where all of our deals make money,” he said.
The Guild generated $25 million in 2019 revenue, up from $10.4 million in 2018, according to Herndon. Every location that’s been open for at least six months is “margin positive,” and while the company is not bottom-line profitable, it is “four-walls profitable,” he said. It’s why the company has chosen to spend money on tech investments and expansion.
“We chose to raise venture capital — we view that capital as a lever, not a requirement,” he said. “We could become bottom-line profitable today, if we wanted to reduce our growth rate.”