Silk housea Dubai-based short-term rental platform coming out of stealth has raised $7.75 million in seed funding, money it plans to use for expansion in South Asia, Southeast Asia and the MENA region.
Venture capital firms that participated in the round include Nuwa Capital, Nordstar, Global Founders Capital, Yuj Ventures, Whiteboard Capital and VentureSouq. Some international family offices and proptech founders also joined this round.
Director Ahan Bhojani and Ashmin Varma founded Silkhaus last year after identifying a $13 billion market opportunity for asset owners in emerging markets, specifically MENA, South Asia and Southeast Asia. In an interview with londonbusinessblog.com, Bhojani, a graduate of HBS and Yale College who had previously worked in positions that required travel such as management consulting and investment banking, said that what drove him to launch Silkhaus was the change in travel habits of small businesses. companies was. entrepreneurs after the pandemic.
“When I was building software for SMBs to book and manage travel worldwide, I saw businesses start doing something different,” the CEO told londonbusinessblog.com over the phone. “Companies traditionally always stayed in hotels. But interestingly enough, now they started asking for short-term rentals as well, you know, basically the Airbnbs of the world. And then I started scratching my head thinking about this whole space from a supply and demand issue.
The pandemic had changed the nature of travel, he said. According to him, the frequency of leisure and business trips decreased, but the average duration of these trips shot up. His interpretation of this event was that these journeys became more nomadic and long-term thinking. But while platforms like Airbnb have aggregated demand wonderfully to meet supply in the US and Europe, it’s a different experience in emerging markets where supply hasn’t aggregated enough to meet Airbnb-driven demand. That is where Silkhaus comes into play. It digitizes the short-term rental process for property owners large and small by providing an operating system with tools needed to monetize and manage their properties. The company claims that it allows property owners to list multiple or single units on the platform with an average increase in sales of between 20-40%.
“Honestly, finding a good Airbnb in these markets is like pulling a needle out of a haystack. And that is what we are looking for,” said Bhojani. “We are merging some of the most successful short-term rental providers and building the highest quality supplier of that inventory to our partners, of which Airbnb is one. Our big vision is to bring quality, control and technology to the space. We exist to ensure that more people can experience quality short-term rentals.”
Essentially, Silkhaus takes over rental units from asset owners (currently in Dubai) and manages distribution, pricing, revenue management and full coverage from a digital perspective; Airbnb is one of about 60 different distribution channels used by Silkhaus. Meanwhile, the company has built tools on the back end, including a marketplace for third-party vendors to access these rentals and make edits.
According to the CEO, Dubai was the ideal market to launch Silkhaus as its infrastructure offers one of the most advanced short-term rental setups, includes progressive government regulation for proptech, and caters to diverse consumer needs. Silkhaus’ engineering team, split between the UAE city and Bangalore, is currently building out its technology stack, the company said in a statement. Chief operating officer Varma leads the team, which is part of a 20-person workforce that includes professionals from Microsoft, Airbnb, Careem and Deliveroo.
Bhojani claims that Silkhaus is currently among the top 3% of operators in the city in terms of units managed. He said the proptech startup, which has grown more than 10x in revenue over the past 12 months, plans to enter the top 1% in the next two months by increasing the range of properties on its platform.
Silkhaus estimates its market opportunity could grow to $18 billion over the next four years. With operations planned for the major economic hubs of Asia and the MENA region, providing guests with high-quality accommodation options and allowing companies to choose extended stays for their employees on Silkhaus will be critical to achieving a significant portion of this to gain market share.
“We are delighted to see Silkhaus emerge as the leading short-term rental platform in Asia, and particularly excited to partner with Aahan and his team, who have proven in a short period of time their ability to manage two large and fragmented industries. to disrupt: real estate and hospitality,” said Ole Ruch, managing partner at Nordstar, in a statement.