Locale plans to use the capital to bolster its staff, expand to new markets and upgrade its product offerings.

Locale, an Austin, Texas-based apartment-hotel startup, announced earlier this month that it has raised $11 million in Series A funding, after closing a small seed round last year. The company plans to expand into new markets, bolster its product offerings and grow its staff with the money.

Nitesh Gandhi | Photo credit: Locale

Nitesh Gandhi, the founder and CEO of Locale, started the company in 2016, after observing the changing needs of travelers, and seeing a hospitality industry that he did not believe was meeting those needs.

The model is simple: Locale partners with multi-family developers and owners to operate luxury apartments as short-term rentals, long-term rentals and flexible stays. It’s a hotel-like experience with the comfort and privacy of residential living, according to Ghandi.

“Multi-family, in the last five years, has been built in a way that rivals the best hotels in terms of upscale amenities, rooftop pools, incredible fitness centers,” Gandhi said. “It seemed like a great opportunity to expose a lot of that high-quality accommodation to more transient travelers coming into the markets.”

The concept of serviced apartments has been around for a long time in Europe and Australia, but other than the extended-stay hotel – which never really caught on with upscale travelers – it hasn’t had a huge market in the United States.

“People enjoy slower travel, they like to stay at home and cook when they come, they enjoy a nice cup of coffee from a local roaster,” Ghandi said. “Those types of experience are almost impossible to achieve in a hotel.”

Travelers are opting more often for short-term rentals than in the past, with the growth of rental platforms like Airbnb and Vrbo. But still, Ghandi doesn’t believe those platforms have enough inventory in urban centers and you don’t always know what type of experience you’re going to get when you rent from one of those platforms.

Locale plans to use the funding to continue to innovate its products and digital experience, including its “Shop My Stay,” platform, where you can shop products from partner brands that the company uses in its rentals, like Parachute bedding and coffee accessories from Fellow. It also plans to continue hiring to bolster its already 30-person team and expand to new markets. Locale is currently in seven markets — Austin, Houston, Dallas, Fort Worth, Nashville, San Francisco and Minneapolis — and plans to be in 10 by the end of the year.

The funding round was led by Amplo, with participation from Susa Ventures and Metropolis Capital Partners, bringing the total funding to date for Locale to $14 million.

“We first decided to back Locale when we realized how thoughtful they are in building the next generation of accommodations for travelers,” Sheel Tyle, founder and CEO of Amplo, said in a statement. “We are now increasing our commitment to Locale as it continues to redefine the short-term rental category by introducing a premium apartment hotel brand centered around quality in-room products, intentional design, local curation and most importantly, a superior hospitality-driven experience.”

Locale isn’t the only company operating in the apartment-hotel space. Sonder has raised millions at a valuation of $1 billion, becoming a tech unicorn. But Ghandi believes it’s a fragmented industry and more competition will bring more exposure to the market and elevate the entire category.

“It’s not a winner-takes-all market,” Ghandi said.

Email Patrick Kearns

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