See the pitch deck a startup trying to rival Airbnb used to raise $14 million to turn entire buildings in Miami and Nashville into short-term-rental apartments for bachelor parties and big groups
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- Travelers love short-term rentals, but many large operators hoping to scale like Airbnb have failed.
- Roami, a startup that operates apartment hotels, recently raised $14 million to continue growing.
- CEO Andreas King-Geovanis walked Insider through the pitch deck he used to raise the funds.
Andreas King-Geovanis didn’t intend to run a hospitality business.
After college, the cofounder and CEO of Roami bought an apartment building in Miami, spending a few years renting it out to tenants signing traditional year-long agreements. As he saw vacation-rental booking giant Airbnb explode — and recalled staying in Airbnbs around the world with groups of friends — he decided to pivot. He listed his units on Airbnb.
“One weekend rental paid for the whole month’s mortgage,” King-Geovanis said.
It was so lucrative that King-Geovanis never looked back to long-term leases. He and his team slowly built up a larger operation under the name Sextant Stays. First, they rented out already-built single apartments via short-term-travel websites, eventually making deals for whole floors, then whole buildings.
The company, founded in 2016 and recently renamed Roami, now works directly with developers to construct new buildings designed for short-term rentals. (Each unit, for example, has many bedrooms.) Guests can book units in more than 15 Roami buildings across Miami, New Orleans, Nashville, and Austin on Airbnb or Booking.com. One Miami apartment that can fit up to 12 guests in eight beds is listed for $575 a night, according to its Airbnb listing.
For a few months in 2020, during the early days of the pandemic, it seemed like the business model was in peril. Guest books were so empty, King-Geovanis recalled, that it was “almost like being hit by a hurricane every single week.” Other short-term rental startups, including Domio, StayAlfred, and Lyric, stopped operating that year.
But, King-Geovanis said, his business expanded, growing more than 600% in 2020 and becoming profitable for the first time. It added six new buildings, some from landlords he called “distressed” and other short-term-rental operators that decided to vacate leases. The total units for rent grew just from under 65 to 300.
To expand further, Roami turned to venture funds for the first time, announcing in March that it had raised a $14 million Series A led by Vigo Capital. The round increased its total funding to $29 million.
King-Geovanis said that the end of 2022 was a challenging time to raise funds as a short-term-rental business. Take all the chatter of an “Airbnbust.” Even the largest and most successful venture-backed short-term-rental operator, Sonder, has had trouble. The San Francisco-based firm, which went public via a special purpose acquisition company in January 2022, said in April that it could be delisted from the Nasdaq for failing to remain above $1 per share. Its stock price hovers around 40 cents, down from its original price of $10.
“VCs are motivated by two things: the fear of missing out and the fear of looking stupid,” King-Geovanis said.
That’s why the pitch deck King-Geovanis used during the recent fundraise focused so heavily on Roami’s profitability, partly due to labor- and cost-saving technologies. Roami has replaced the classic hotel lobby bar with a machine that dispenses alcoholic beverage. It has subbed out on-site front-desk staff with a cheaper, foreign worker who interacts with guests through a telepresence robot such as the one Edward Snowden famously used.
King-Geovanis walked Insider through the pitch deck he used to raise Roami’s latest round.
This slide kicks off Roami’s Series A deck by showcasing one of the company’s most impressive properties on the Miami waterfront.
King-Geovanis wanted to set Roami apart from competitors. Not only did it grow during 2020, the industry’s hardest year yet, but it became profitable.
This slide lists how Roami became profitable: It has low labor costs and favorable agreements with landlords, it controls whole buildings rather than individual units, and it focuses on density in existing markets instead of launching in new ones.
This slide showcases the challenges of spending long periods in cramped hotel rooms, a challenge only made worse when traveling with a group. King-Geovanis called it the company’s “problem slide.”
This photo, which Roami staged, showcases the conflicts that could arise in large buildings that have both long-term tenants and short-term guests. The young men drinking and vaping on the couch are occupying the same space as the mother with her child. Regular buildings force people who have to go to work at 5 a.m. and people who come back from the club at 5 a.m. to clash, King-Geovanis said.
Roami’s focus on attracting big groups is helped by the relative undersupply of group travel accommodations, shown here compared to demand.
The video on this slide walks potential investors through all of the perks and features of a Roami property. King-Geovanis said that next time, he wouldn’t include a video in the presentation, as it can confuse investors who don’t realize they need to click to start it.
This slide’s goal is to showcase how much opportunity there is in the short-term-rental world. The number of different big hotel brands proves that hospitality is not a winner-takes-all market. Meanwhile, there was only one short-term-rental competitor with a valuation of over $1 billion at the time the slide was made: Sonder.
King-Geovanis said he verbally compliments Sonder’s brand while walking investors through this slide. He tries to differentiate Roami’s model from Sonder’s without criticizing it.
This slide highlights the opportunity for hospitality, with domestic travel coming back in 2022, and growing cohorts of travelers like digital nomads.
This slide showcases technologies that Roami uses in its properties, such as a robot bartender and concierges who live in other countries and speak to guests over video chat using a telepresence robot.
Roami has developed some technology in-house, from a mobile app to a virtual walk-through before booking.
This slide compares Roami’s capital efficiency to Sonder’s, with the goal of showing VCs that Roami can both be profitable and grow simultaneously.
This slide digs into why Roami is able to turn a profit: It runs a lean in-person payroll and outsources some roles — like front-desk duties— to other countries with cheaper labor.
Roami rents 47% of its apartment units from landlords, then turns around and rents them to travelers. The remaining are controlled under profit-sharing deals with the apartments’ owners.
This slide shows the company’s growth since 2020, expanding from 50 units in 2020 to just under 650 at the start of 2022.
The company’s strategy requires clusters of buildings located near each other, so Roami only operates in a few cities that draw a lot of tourists. It has plans to expand to other areas, but slowly.
The company has ambitions to span three huge industries: hospitality, property management, and the ownership of real estate itself.
This slide is a classic in every pitch deck. Two of the C-suite founders, Brandreth Canaley and Iskander Karimov, were on the Forbes 30 under 30 list in 2022 for their work at the company.
The presentation ends with its motto, which points to what Roami sees as the difference between it and other operators.
Axel Springer, Insider Inc.’s parent company, is an investor in Airbnb.