Two new types of real estate tech startups have been sucking up more oxygen lately: “co-living” startups that facilitate living with roommates and “iRenters” — basically iBuyers for the rental market.
Now, a hybrid of these two models, Bungalow, has announced bagging an additional $47 million in one of the larger funding rounds for a real estate startup as of late. That brings its total funding to $68 million so far, by Forbes’ count.
As an “iRenter,” Bungalow has been leasing single-family homes from their owners, repurposing them to accommodate more tenants and then subleasing the units room by room to a target demographic of 20-something professionals.
In some ways, this resembles how iBuyers have tackled the housing market: rather than sell a home on behalf of a homeowner, they make offers on homes and buy them directly.
Likewise, rather than manage units on behalf of a landlord, iRenters make rent offers to owners and then rent the units directly from them, or at least guarantee payment of rent.
Bungalow is growing fast and propelled by a number of well-resourced investors who have also fueled the rise of Opendoor and other big-name real estate startups.
Two years after its official launch, Bungalow reports leasing units to more than 3,200 tenants living in 730 homes across 10 markets, including New York City, Washington, D.C., Chicago, Los Angeles and Seattle. It expects to “accommodate” more than 12,000 tenants by the end of 2020.
Keith Rabois, a co-founder of Opendoor, remains closely involved with Bungalow.
Founders Fund, where he recently became a general partner, led the funding round, while the venture capital firm he was previously at, Khosla Ventures, also participated in the Bungalow funding round, marking at least Khosla’s second investment in Bungalow. Khosla has also been a major investor in Opendoor and Roofstock, a marketplace for tenant-occupied single-family rentals.
As renters increasingly cram together with strangers, Bungalow seeks to improve the experience of living with roommates — a situation that startups like Bungalow call “co-living.”
Prospective tenants can browse hundreds of listings on Bungalow’s website, each of which shows the number of vacant rooms available. They can sign leases as short as four months and pay a membership fee that covers utilities, such as WiFi, monthly cleanings and events hosted by Bungalow.
The units are designed to foster community while accommodating quick turnover.
Other iRenters include Doorstead, which focuses on traditional long-term tenants, and Blueground, which caters to business travelers and recently nabbed $50 million in funding.
While Bungalow had previously focused on leasing units directly from landlords, Forbes reports that it’s recently been experimenting with a less risky model: managing the units in exchange for a cut of the rent paid by tenants.