A hotel minibar might give some travelers a fleeting sense of calm in an unfamiliar place. But there's growing demand for a homier vibe that includes a fully furnished apartment and thoughtful touches, like a Crosley record player and locally roasted coffee for the morning.
That's where The Guild fits in. The Austin-based hospitality tech startup partners with apartment building owners to provide short-term rental units to travelers. And it gives guests a lot of techy touches, like personalized text communications for check-in and check-out procedures and the ability to have food and other travel items ready for you when you arrive.
Since co-founders Brian Carrico and Chris Herndon launched The Guild in 2016, the startup has expanded from seven apartments at the Corazon on East 6th Street in Austin to more than 800 units in Austin, Dallas, Cincinnati, Denver, Miami and Nashville. And the company just raised $25 million in new investment to expand to a total of a dozen markets by 2021.
The new round came from traditional venture capital firms Maveron, Convivialite Ventures and ATX Venture Partners -- and from strategic real estate partners RXR Realty, Corigin and Nicol Investment Group. That comes after a $8.5 million Series A led by Maveron in 2018.
In addition to its market expansion, Herndon told Inno that The Guild generated $10 million in revenue in 2018 and more than $20 million in 2019. He expects that 100% year-over-year growth to continue as the team adds new features and new markets.
“We focus a lot of on technology," he said. "But the main objective of that tech is to deliver an exceptional and memorable experience.”
Before launching The Guild, Herndon was co-founder of San Francisco-based Apartment List, which helps people connect with available units. He's also a University of Texas graduate, like co-founder Brian Carrico, who develops and operates boutique hotels with Alexa Management.
Herndon said he and Carrico both traveled frequently in their earlier professional years and saw an opening for a more meaningful and personalized experience than hotels offered. They also thought they could eliminated a lot of the overhead hotels incur.
Their idea of using apartments as short-term rentals wasn't simple, however.
"It doesn't come organically," Herndon said.
The Guild has worked closely with apartment owners, operators and tenants to ease concerns about mixing short-term and long-term tenants. The Guild typically uses an entire floor of an apartment building to consolidate short-term travelers away from full-time residents and renters. It also offers full-time residents access to discounted cleaning services, as well as discounted stays at any Guild units.
Meanwhile, the startup has worked closely with businesses that need space for traveling employees. Those include several Fortune 1000 firms that negotiate fixed nightly rates. Its clients have included, for example, Google, Salesforce, Whole Foods and Wal-Mart.
The Guild faces significant competition across the hospitality landscape with startups like WhyHotel in Washington, D.C. and Sonder in San Francisco. But demand for alternatives to traditional hotels has been booming.
Herndon said the competition is largely beneficial because, whenever any of these new players provide a great experience, it helps improve the reputation of similar businesses and spreads the word among travelers.
"It's not a winner-take-all space," he said.
The Guild currently has 171 employees, including about 110 at its Austin headquarters. Herndon said the company plans to stay in Austin.
“It’s a small startup environment, but it’s much more supportive and collaborative,” he said, comparing it to the Bay Area. “The talent here, the momentum here ... it's been great both professionally and personally.”
