Alex Chatzieleftheriou founded Blueground in 2013, frustrated by the lack of short-term furnished apartments in Europe. He was traveling as a consultant for McKinsey & Co., and had been living mostly in hotel rooms for months.
“At one point, the company had to pay up to 15,000 euros for a hotel room in Amsterdam, and there was neither enough space nor a kitchen to cook,” he said. “I tried renting an apartment for more than a month. But it was difficult and the landlord was not willing to buy furniture. So I started my own business to solve the problem.”
Years later, in the midst of a pandemic, with people working from home and roaming the world, business was booming in his startup's category: short-term furnished apartment rental companies.
Demand for temporary housing is soaring now that many employers have called workers back to the office.
Some of his competitors did not survive. Zeus Living and WanderJaunt closed the door and returned the keys. Some were acquisition opportunities for Blueground. In 2022, the company acquired Tabas, which operates more than 9,000 furnished apartments in Brazil, establishing a strong foothold in Latin America. Within months, Blueground acquired Traveler's Haven, his 15-year-old business that provides on-demand housing to workers in about 20,000 cities across the United States. In 2023, it acquired Nestpick, a marketplace for furnished apartment operators like Kasa and Placemakr, giving customers access to an additional 18,000 apartments.
Blueground currently operates a global network of move-in ready homes for stays of one month or longer and has received Series D funding from new investors Susquehanna Private Equity Investments and other backers including WestCap. The company has raised $45 million, Chatzieleftheriou told TechCrunch. The New York-based company also secured a debt facility from Barclays with participation from Morgan Stanley, Deutsche Bank and HSBC, replacing $40 million in debt Blueground acquired from Silicon Valley Bank in 2021. He said the amount had been increased.
Blueground rents out apartments in popular neighborhoods and provides amenities and furniture for renters. The company currently manages his 15,000 apartment units in 32 markets in 17 countries. In addition to its own leasing arrangements, Blueground recently partnered with local operators in Japan and Thailand and introduced franchising to list third-party operators' units on its platform.
The company did not disclose the new valuation, but Chatzieleftheriou said the company's value has increased since the previous round. It was reportedly valued at $750 million after raising $140 million in Series C in September 2021.
It's no secret that late-stage companies, especially those in the proptech space that have been hit hard by rising interest rates, have found themselves in an extremely difficult funding environment.
Chatzieleftheriou told TechCrunch that the company's rapid growth and near profitability helped convince investors for its latest funding.
Sales in 2023 rose 70% to $560 million, compared to total revenue of $300 million in 2022, Chatsilefteriou said. He added that he expects Blueground to be cash flow positive in 2024, with a net sales margin of approximately 35% after paying lease payments to landlords.
Given Chatzieleftheriou's predictions of industry consolidation, further acquisitions seem likely, but the immediate focus is on consolidating recent acquisitions. The new funds will be used for market expansion, technology investments, and perhaps the ultimate financial goal: an IPO.