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The short-term rental startup Frontdesk is on the verge of shutting down after a failed bridge round, according to a report.
The startup, which managed over 1,000 furnished apartments throughout the United States, laid off its entire 200-person workforce on Tuesday, according to a report in TechCrunch, after attempts to raise more capital failed.
All 200 full-time staff members, along with contractors and part-time staff, were dismissed during “a two-minute Google Meet call,” unnamed sources told TechCrunch. During that call, Frontdesk CEO Jesse DePinto told the fired employees that the company would be applying for state receivership, an alternative to bankruptcy, according to the report.
The company has not issued a statement regarding the layoffs and did not respond to a request for comment.
The mass layoff comes seven months after FrontDesk acquired its smaller short-term rental rival, Zencity.
Frontdesk was founded in 2017 and has raised approximately $26 million from investors including Veritas Investments, JetBlue Ventures and Sand Hill Angels.
Their recent troubles came after the company went out for a bridge round with a new plan to sell investors on doing full building management. The pitch fell flat, however, and the company couldn’t continue operating, according to the report.
The startup operated on a model of leasing rental apartments at market rate, furnishing them, and subleasing them out as short-term rentals in more than 30 markets across the United States. That business model has struggled of late due to the high upfront costs of rental apartments, high interest rates, and varying levels of demand.
Other short-term rental companies including Stay Alfred, Domio, Lyric, Zeus Living, The Guild and WanderJaunt have shut down in recent years despite raising considerable sums of cash, with Airbnb and VRBO retaining their spot atop the short-term rental space.
