MetroResidences, a Singapore-based platform, which helps individuals rent out their apartments to corporate travellers via its online website, announced Monday that it had raised S$1 million seed funding, led by global venture capital seed fund and startup accelerator 500 Startups.
The company, which is now 18 months old, said it currently had more than more than 200 high quality furnished apartments within its inventory of homes, and added that it would use the proceeds from this funding round to capture 10% of the serviced apartment market in Singapore, and to expand to one other Asian city within this year.
Other participants who coinvested in the round include the former chief executive of Pacific Internet, Phey Teck Moh, exfounder of JobsCentral, Lim Dershing, Co-CIO at Phillip Capital Management, Linus Lim and Ashok Melwani, the chief executive of A B Melwani.
Interestingly, the team behind MetroResidences – co-founders Lester Kang and James Chua – had been running another portal called PandaBed, a clone of Airbnb, but with an Asia-centric focus, for the last couple of years. Lester Kang declined to specify details, and it is not clear if PandaBed did a pivot to focus on corporate customers, under a new entity in MetroResidences. Kang also did not clarify if MetroResidences and PandaBed, which continues to be operational, are part of the same holding company with common investors.
To date, MetroResidences claims to have housed over 100 multinational companies and 200 small to medium enterprises, chalking up to over 10,000 apartment nights booked.
The serviced apartments space in Singapore s highly competitive, with several large players and global entities in this space. Last week, CapitaLand’s wholly-owned serviced residence arm The Ascott Ltd said its global network of more than 26,000 serviced apartments in over 60 cities would be available on Alitrip, the online travel service platform of Chinese e-commerce giant Alibaba Group.
Khailee Ng, Managing Partner at 500 Startups, was of the view that ‘for a long time corporates had to rely on brands such as Frasers and Ascott’.
“MetroResidences is now offering them a fresher option, to take a piece of this billion dollar market,” he added.
This financing, which is the company’s first funding round, is expected to give it significant runway to scale up.
“Whilst many companies look at seed funding as a finite runway, we believe in operating our business such that we are maintain a cash flow positive position. We take a long-term perspective and prioritize business continuity. That said, the $1 million funding will be pumped into growing the sales team, to acquire more quality assets and improve our sales platform to serve customers more efficiently and effectively,” Kang said in an interaction.
He also highlighted that it took the company just 30 days to close its funding round, and attributed investors’ confidence ‘sales traction and repeat bookings’.
In its media statement, the company emphasised its selling points that its portfolio included the best apartments that were in excellent condition, near subway stations and with good facilities and amenities.
“With fresh funding, MetroResidences will double its effort on growing its existing assets through a multichannel and stakeholder approach by targeting developers, private investors, real estate funds and existing property management companies,” the statement added.
DEALSTREETASIA spoke to co-founder Lester Kang on the company’s plans, the market in Singapore, and its positioning with respect to competitors. Edited Excerpts.
You are currently Singapore-based – what are the expansion plans for 2016.
MetroResidences is looking to expand into another Asian City, most likely a business hub like Singapore, where business travellers are commonplace.
The serviced apartments space is quite competitive – where/how does MetroResidences differentiate itself with the other players in the market?
Asset light. We are asset light. We do not own apartment buildings; we act as a platform that connects business travelers with the best serviced apartments in town; as a result we boast the greatest variety and cross section of apartments by budget and location. Variety is a strength
Value for money – On a dollar per person per square foot per month basis, we offer unparalleled value serviced fully furnished apartments
For apartment owners in Singapore, how do you convince them to sign up with you? How many properties do you currently have in Singapore, and off these how many are exclusively yours?
Asset Owners in Singapore see the value in working with MetroResidences, because we offer them better clienteles with longer durations. We also provide turnkey property management services such as housekeeping and maintenance. We work with several types of Assets Owners. They are developers, existing serviced residences operators or individual investors with vacant apartment. Currently we hold an inventory of 200 apartments under management and are looking to grow this number significantly in 2016.
Larger players in this space, who offer serviced apartments to both corporates and tourists, offer additional facilities like WiFi, breakfast, a front-desk, and others. In the case of MetroResidences, as you don’t offer these facilities, are you therefore competing on the price points? Again, for the corporate customer, does that say 20% to 30% matter?
Yes the savings do matter. We were able to house 4 corporate clients from a Korean construction company, accompanied by their respective families over 6 months in Singapore. The company was able to save $2000 per apartment per family. You do the math – that’s a sizeable saving of $48,000! Location is another key reason; as we can accommodate their staff in closer proximity to their offices. We have families requesting to be located in the suburbs and local amenities such as an international school or neighborhood mall.
An important factor is safety. How is this addressed?
MetroResidences sources for apartments in Singapore that meet our stringent standards of quality and security. Let’s not forget this is no Airbnb, so there is absolutely no sharing of rooms involved. Our apartments are self-contained units; so from a security perspective it is superior or equivalent to a reputable hotel.
Can customers leave reviews of the properties that they’ve stayed at? Also, what are the referral points for a new customers who is looking at some of the apartments on offer for rental in SG?
At the moment we have an internal review form given to the customer after their stay. We’ll be publishing these reviews on our site sometime in the next couple of months to make selection a more interactive process. In B2B, reviews works differently from your typical B2C site like Tripadvisor site because Company executives are concerned with anonymity. We’ll have to balance the requirement for anonymity of previous guests with the due diligence requirements of potential guests. Arguably, the more important thing is for the Company to communicate its accommodation requirements to our sales staff; ultimately our staff recommendations carry the greatest weight in terms of what is going to be a successful Launchpad for their stay in Singapore.