Boutique hotel company Life House has closed $40 million in funding to develop its lifestyle hotel brand and proprietary technology platform. The company will use this technology to “drive direct bookings, optimize operations, and foster a social community for travelers much like today’s modern direct-to-consumer brands,” according to the company. It will launch its booking platform mid-summer.
The $10 million in venture funding consists of a seed round in September 2017 led by Comcast Ventures and a Series A round in February 2018 led by Global Founders Capital. The remaining $30 million in private equity was provided by Henley Investment, a real estate investment group.
Life House was founded in 2017 by Rami Zeidan, who has worked at Starwood among other hotel brands, and Yury Yakubchyk, a technology expert and entrepreneur.
“Just like today’s direct-to-consumer lifestyle brands, nearly all hotel revenue is generated through online channels, but traditional hotels still structure and operate themselves like brick and mortar management businesses,” CEO Zeidan said in a statement. “We are applying the best practices from the ecommerce space to lifestyle branded hotels and are thrilled to have investors who believe in our technology and growth strategy.”
Life House is a vertically integrated platform and the company operates hotels as well as develops and designs them for real estate owners. Life House plans to attract travelers by using customer information to match individuals with compatible roommates if they book more than 48 hours prior to arrival. Life House is also launching a social network through its platform that allows individuals to connect with roommates after booking.
“We are seeking to cater to customers that desire to spend on a lifestyle experience, rather than an isolated expensive hotel room,” CEO Rami Zeidan told Crunchbase News in an email. “The social network makes it easier to book a trip as an individual, and we are really aspiring to encourage more individual travel and provide an efficient alternative to the potentially unsafe, unclean, and remote home sharing products.”
In addition to incentivizing referrals with free trips and drinks, the company plans to leverage data to acquire customers.
“Sophisticated customer acquisition primarily involves using data and technology to acquire customers, which requires really technical ROI analysis that doesn’t exist in the lifestyle hotel industry due to a historically complex evolution of technology add-ons in the space,” Zeidan wrote.
Life House will launch its first two hotels in Miami this fall, followed by a property in Brooklyn, New York in early 2019. Zeidan explained that the company looks for properties that are “ripe for a rebranding or repositioning” through property owners and their existing relationships. He told Crunchbase News that the cost of each building project depends on its size, existing condition, development scope, and current market dynamics.
“To date, the average capitalization of each project has been [around] $10 million, but the company is under contract for a $20 million project to launch later this year,” Zeidan said.
Leading up to its first opening, Life House has been running a pre-launch referral campaign that offers free trips and opening party invitations in exchange for spreading the word - a product that is commonplace in Silicon Valley, but a first for the hotel industry, the company said.