Frontdesk, a Milwaukee startup that offers short-term apartment rentals for business and vacation travelers, raised a new round of funding to help it endure the COVID-19 crisis.
The company, founded by Kyle Weatherly and Jesse DePinto, announced Tuesday that it raised $6.8 million in a Series A round in a combination of debt and equity. Weatherly declined to disclose the investors, but said the company surpassed its original funding goal of just $4 million.
“In the short run, the funding is to make sure that we survive,” Weatherly said. “In the medium and long run, it’s to be opportunistic.”
Frontdesk began raising this round before the coronavirus crisis became serious in the U.S., but was able to still close the round this month, Weatherly said.
“When the world changes on something we did not anticipate, investors can either abandon ship or they can continue their commitment,” he said. “In our case, they did so in spades.”
To date, Frontdesk has raised more than $9.5 million. Last summer, the tech company raised a $2.75 million bridge round.
The new financing comes after Frontdesk laid off 35 employees earlier this month, citing negative impacts on business from the coronavirus crisis. In an interview with Inno, Weatherly said the startup’s revenue dropped 60 percent since the coronavirus pandemic started. The startup now employs about 200 people.
However, Frontdesk says that when the coronavirus crisis concludes and the travel industry begins seeing growth again, the financing could help rehire those laid off employees and hire “dozens” of new ones this summer.
“Relative to where we were in March, we’re already starting to see a pick up in bookings in the last couple weeks,” Weatherly said. “We anticipate that we will be fairly aggressive once the market stabilizes. Travel always comes back.”
Founded in 2017, Frontdesk currently operates in 28 cities with more than 500 apartment suites for business and vacation travelers. Suites are on average 3x the size of the typical hotel room, Frontdesk says. The startup has hosted more than 60,000 stays to date, ranging in length from one night to six months.
