Airbnb is leading a $160 million funding round for Lyric, a San Francisco-based company that manages multifamily apartment complexes and rents out those units on platforms that include Airbnb, HomeAway, and Booking.com, among others. The Series B investment confirms an earlier report from December when The Information originally reported Airbnb was planning to lead a $75 million investment round in the accommodations brand, as reported by Skift.
The $160 million round on Wednesday is led by Airbnb, as well as new investors that include Tishman Speyer, RXR Realty, Obvious Ventures, SineWave, and former top Twitter executives Dick Costolo and Adam Bain. Current investors Barry Sternlicht, NEA, SignalFire, FifthWall, and Tusk Ventures have also participated in this latest round of funding, bringing the company’s total funds raised to a grand total of $185 million.
Lyric is one of a crop of newer professional accommodations operators whose competitors include companies like Sonder, Stay Alfred, and others. They’ve essentially serviced apartment businesses that are licensed to run as a hotel (avoiding regulatory challenges), and they use marketplaces like Airbnb to advertise their accommodations Moreover they rely on technology to wring out efficiencies, manage the guest experience, and eventually grow to scale.
“We’re not a hotel. We’re not an Airbnb. We basically design and operate what we call ‘creative suites,’” explained Joe Fraiman, president and co-founder of Lyric. Those suites, he said, are “spacious studios, one-bedroom or two-bedroom suites on full floors of premium, either multifamily or mixed-use buildings, in 13 U.S. markets.” To date, Lyric has more than 500 rooms across 400 units nationwide.
Lyric‘s target audience, Fraiman said, is “the modern business traveler,” often in their late 20s to early 40s and working in a variety of industries, who “is looking for travel that’s much more experience rich.” He continued, “So, as opposed to a standard hotel room where you’re kind of just getting a bed and a TV, this traveler is looking for a lot more than that — it‘s being integrated into the community and having a higher quality experience.”
Lyric’s units are master leased from landlords and are operated full time as accommodations for travelers, and the company has also been a part of the Airbnb Plus program, which highlights listings that have been vetted for quality assurance by Airbnb.
In the simplest sense, Lyric represent a newer generation of serviced apartments who are bridging the gap between what we think of as traditional accommodations (hotels) and what we typically think of when it comes to private accommodations (Airbnb and other short-term rentals). Products like these are what the alternative accommodations industry needs to evolve and to reach more mainstream audiences.
“These new business models are really trying to make a big wave, and the fact that they are getting into a new aspect of overall hospitality is representative of the convergence that’s happening in the space,” said Simon Lehmann, CEO and founder of AJL Consulting and the former CEO of Interhome, a Swiss home rental platform.
He continued, “Lyric, Stay Alfred, and Sonder are building consumer-facing hospitality brands with a different type of product from hotels that is more structured, and their appetite in raising capital is quite phenomenal. There’s an appetite from an investment standpoint, and the margins seem to be a lot healthier than just doing private accommodations like renting out second homes and managing those. In the economic upturn, we’re at right now, this seems to make a ton of sense.”
