Silkhaus, a Dubai-based short-term rental platform emerging from undercover, has raised $7.75 million in seed funding, money it plans to use to expand 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 group.
CEO Aahan 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 TechCrunch, Bhojani, an HBS and Yale College graduate who previously worked in various positions that required extensive travel, such as Entrepreneurs after the pandemic.
“At some point, when I was developing software for SMBs to book and manage travel around the world, I saw that companies started doing something different,” the chief executive told TechCrunch on a call. “Businesses have traditionally always stayed in hotels. But interestingly now they started asking for short term rentals too, you know, basically the Airbnbs of the world. And that’s when I started scratching my head and thinking about this whole space starting from a demand and supply problem.”
The pandemic has changed the way people travel, he said. While the frequency of leisure and business trips has declined, the average duration of these trips has skyrocketed. His interpretation of this event was that these journeys were meant to be more nomadic and long-term. But while platforms like Airbnb have fantastic aggregated demand to match supply in the US and Europe, it’s a different experience in emerging markets where supply isn’t sufficiently aggregated to meet Airbnb-pulled demand. This is where Silkhaus comes into play. It digitizes the short-term rental process for both large and small property owners by providing an operating system that includes tools needed to monetize and manage their properties. The company claims it allows property owners to list multiple or single units on the platform, with an average increase in sales of between 20% and 40%.
“Honestly, finding a good Airbnb in these markets is like pulling a needle out of a haystack. And for that we solve,” said Bhojani. “We are merging some of the most successful short-term rental providers and building the highest quality supplier of that inventory for our partners, which include Airbnb. Our grand vision is to bring quality, control and technology to space. We exist to ensure more people can experience quality short term rentals.”
Essentially, Silkhaus takes on rental units from asset owners (currently in Dubai) and manages distribution, pricing, yield management and full coverage from a digital perspective. Airbnb is one of around 60 different distribution channels used by Silkhaus. In the meantime, the company has developed tools on the backend, including a third-party marketplace, to access these rentals and handle operations.
According to the CEO, Dubai was the ideal market for Silkhaus’ launch as its infrastructure represents one of the most advanced facilities for short-term rentals, embodies advanced government regulation for proptech and welcomes diverse requirements from different types of consumers. Silkhaus’ engineering team, which is spread across the UAE city and Bangalore, is currently expanding its technology stack, the company said in a statement. Chief Operating Officer Varma leads the team, which is part of a 20-strong workforce that includes professionals from Microsoft, Airbnb, Careem and Deliveroo.
Bhojani claims that Silkhaus is currently in the top 3% of operators in the city in terms of managed units. He said the proptech startup, whose revenue has grown more than 10-fold over the past 12 months, plans to break into the top 1% over the next two months by expanding 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 in Asia’s leading economic hubs and the MENA region, offering guests quality accommodation options and enabling companies to choose extended stays for their employees on Silkhaus will be crucial to capturing a significant portion of this market share.
“We are pleased to see Silkhaus emerging as the leading short-term rental platform across Asia and are particularly excited to partner with Aahan and his team, who have in a short space of time demonstrated their ability to revolutionize two large and fragmented industries: real estate and hospitality,” said Ole Ruch, managing partner at Nordstar, in a statement.