Q&A: Wunderflats CEO, Jan Hase

Part of our series on startups in the Apartment Rental space. #1

Over the next month, PD Reporter will publish a series of exclusive interviews with startup founders, executives, and investors involved in the apartment rental space, followed by an insights reports on the space.

According to AngelList, there are 714 startups in the rental housing space, with an average valuation of USD 4.5m.

Wunderflats is a Berlin-based provider of fully furnished housing across Germany. The company raised its last round of funding in late 2017, a series A, with Creathor Ventures acting as the lead. In this Q&A, Jan Hase, CEO and co-founder, talks about the possibility of raising a series B round in 2018, the company’s housing-as-a-service model, and trends shaping the apartment rental space.

(This interview has been lightly edited for clarity).

How many employees does the company have? And when was the company founded?

We have 48 employees. Wunderflats was founded in January 2015.

What sets Wunderflats apart from others in the apartment rental space? What geographies and/or niches does Wunderflats serve?

Wunderflats is the first company to offer housing as a service. Young professionals, consultants, interim managers or interns can instantly book an apartment online for temporary stays in any German city. In total, you can book roughly 22,000 apartments on wunderflats.com.

Who do you see as competitors in the space?

Local agencies, but in many cases we are able to cooperate with them. There is another startup in cologne, called Homelike that operates in the space as we do.

According to Crunchbase, Wunderflats has raised a total of USD 4m, and the last round was a EUR 3m Series A round in November 2017. Is that accurate?

EUR 4.125m is the total amount and EUR 3m was the Series A.

There’s been some talk amongst VCs that while total amount of venture capital investment is up over the past couple years, early stage investment has become harder to secure. What’s been your experience as you’ve talked to prospective investors? Have the milestones for investment changed?

From my point of view there is an overhead on seed investors right now. A lot of startups get funded that would not have been funded 2-3 years ago. There are also a lot of Series A investors, but the mentality differs from region to region. German investors are way more into early numbers than UK or US based investors, for example. I don't know how hard it is to raise a Series B. But I can probably answer this question later this year.

Have conversation for a Series B round begun and how likely is it that Wunderflats could close a round over the next year? Any thoughts on how much capital you would look to raise?

Right now, we are heads down in execution mode. But in December we started to talk to some Series B investors and we will continue talking to them in early Q3. It's important to us to find a good partner in the investor, that also shares the vision of housing as a service and wants to build it now, instead of waiting another 5-10 years for it to happen.

Will partnerships play a role in your near term goals? What types of partnerships?

We have close partnerships with a series of companies. As the platform for housing as a service, we are in the middle of the whole ecosystem. That's why we cooperate with furnishers, relocators, local agencies, investors (that are interested in buying furnished apartments) among others.

Are there any trends or macro factors that you foresee having an impact on the space?

There are four major macro trends that shape how we will consume housing in the near future. First mobility, people are more and more willing to move and get less bound to a place. It becomes easier and faster every year to travel from one place to another. But to actually live there, a housing as a service provider is missing.

Second, individualization: people are becoming more selfish. But not in necessarily in a bad way. They focus more on their own needs. If you are born in the countryside you probably want to move to a city to visit a nice university. Even if you are born in a city with a good university, you probably want to go to the best University. Same goes for the best employers or places with best living conditions. People are way more willing to fullfil theirs dreams.

Third, globalization: yes the thing you heard of in school is still a thing and ongoing.

Fourth, on-deamand society: people increasingly want everything as fast as possible and preferably instant. You want to be able to book your taxi with one touch of your thumb. Order food within 15-20 min instead of one hour or cooking it yourself. You don't want to own a car, you just consume mobility the very moment you need it. The same thing is happening to housing. We don't want to search for days, do viewings with 100 other people jut to get rejected because someone else earns more money than we do. We want to book an apartment the very moment we need it, we want to be able to consume housing as a service. Just like it's happening to mobility.

Do you see dealmaking in the space picking up over the next 12-24 months? What factors do you see contributing to this outlook?

The real estate market is one of the least digitalised sectors. There are ton of startups trying to disrupt the old economy and many of them are very successful doing so. In addition it's one of the largest industries. Of course the industry will be bothered by technology. Where there is disruption, there's also growth and investors, that participate and make it happen faster as it would naturally.

Are there any adjacent spaces that could be attractive for the company to expand into at some point?

We plan to grow by expending in new markets, not by integrating horizontally or vertically. As a platform it's important to stay focused on your core interaction and make adjacent players more successful, as they interact with your platform.

Any figures on the company's growth that you would care to share (e.g. X number of rentals, X number of users, etc...)?

We are offering almost 22k fully furnished rentals in Germany, half of them are located in Berlin.