AIRBNB'S GRAND PLAN
While no one was looking, Airbnb has quietly turned into a powerful investor in Silicon Valley.
The home-sharing startup is leading a $160 million funding round in Lyric, a San Francisco-based startup that turns new apartment buildings into hotel-like properties for business travelers. The company plans to use the money to help expand its footprint beyond the 13 U.S. cities in which it currently operates.
Airbnb’s investment in Lyric, in some ways, helps its own business. Lyric leases entire floors of apartment buildings, designs the spaces for travelers, and then lists them on its own site and on other sites like Airbnb.
Lyric, founded in 2014, has long had ties with Airbnb. Lyric CEO Andrew Kitchell rented his apartment through Airbnb during Airbnb’s first year as a startup. Kitchell even once hosted Airbnb CEO Brian Chesky at his home.
The relationship between Lyric and Airbnb grew over time. Kitchell said that Lyric provides Airbnb with reliable inventory that follows city regulations, “so [Airbnb’s] investment in us makes a lot of sense.”
Airbnb declined to comment on Lyric’s funding beyond a vague statement praising the company’s technology and its skill in designing the interiors of its apartments.
The home rental behemoth has been tight-lipped about its capital deployment. You might remember that just a few weeks ago, Airbnb invested $150 million to $200 million in Indian hotel chain OYO. It also poured money into The Wing, a network of community spaces designed for women, in December. Other than a statement to TechCrunch that said, he is “incredibly inspired” by The Wing and is “thrilled to support them,” Airbnb CEO Brian Chesky didn’t divulge much more.
So what’s Airbnb’s play here? In my opinion, players like Airbnb and WeWork are trying to figure out how to capitalize on physical communities in an increasingly digital world. By investing in these companies, they get a lot of intel about the business model, and it open doors for experimentation through partnerships and integrations. If companies like Lyric and The Wing can move beyond their physical tight-knit networks and successfully scale digitally, don’t be surprised if they turn into alluring acquisition targets for some of these real estate-turned-tech-company-turned-venture-investor giants.
PS: I am coming to San Francisco and possibly Los Angeles next week. If you’re a VC and you want to meet, shoot me a quick note about your availability at email@example.com.
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HEALTH AND LIFE SCIENCES DEALS
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PRIVATE EQUITY DEALS
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FIRMS + FUNDS
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