Paris-based Leavy.co, a startup aimed at millennials that rents rooms from travelers in order to sublease them, has raised a $14 million funding round, the company disclosed this week.
The startup will use the cash to further expand a network of users that it says has grown to include 65,000 millennials, TechCrunch reports. It currently operates only in Europe with offices in Paris, London, Madrid, Rome, Lisbon and Amsterdam. But it plans to launch in the U.S. by the end of the year, TechCrunch reports.
“We are the first pure-scale marketplace that takes a risk for its users,” CEO Aziza Chaouachi told TechCrunch. “As network orchestrators, we generate profit with dynamic pricing. Our tech is obsessed with finding the optimal point of satisfaction for every user.”
Leavy rents homes from people who are traveling and subleases units to visitors while they’re away. It uses “hosts-on-demand” to manage short-term rentals, assigning hospitality gigs that could suit real estate agents.
Essentially, the startup brings the approach of iBuyers and iRenters to the short-term rental market, offering guaranteed revenue and taking on risk for a crack at a profit on a transaction-by-transaction basis.
It touted to TechCrunch a mission to help debt-saddled millennials travel more often, but the service doesn’t appear to be off limits to people who are older or don’t have debt.
Leavy pays a fee to renters and homeowners upfront before they go on trips. Then it tries to lease the home to out-of-towners itself, turning a profit if it can successfully sublease the unit or taking a loss if it can’t. It’s betting that its pricing algorithm can secure the former outcome more than the latter.
Leavy saves on employment costs by outsourcing management to local “hosts-on-demand.” Another addition to the gig economy, these are people who sign up to receive property management assignments. Leavy also touts the role as a way to join its community.
Leavy’s long-term project is to build a network of travelers and hosts who host and travel within its system.
Travelers, including those who rent their homes to Leavy, can book flights, activities and accommodations on the platform. They also can earn credits, so called “Leavy Coins,” by buying goods, sharing recommendations and posting photos on its app. They can put those credits toward products and services they purchase through Leavy.
Some real estate agents double as property managers. So if Leavy starts divvying out hospitality gigs in the U.S., they could be an easy way for agents to earn a bit more supplemental income.