Financial hardships caused by the COVID-19 pandemic have impacted one of Milwaukee’s fastest-growing startups.
Jesse DePinto, a co-founder Frontdesk, the Milwaukee-based startup that offers short-term apartment rentals for business and vacation travelers and an Inno 50 on Fire 2019 honoree, recently posted on LinkedIn that the company had to lay off 35 employees, which represents 16 percent of its total workforce.
The positions included digital marketers, data analysts and hospitality cleaners, DePinto wrote.
"Today was one of the hardest days we've experienced at Frontdesk," DePinto wrote. "These tech-savvy individuals are hard-working, autonomous, and incredibly reliable, especially in a remote-working culture."
The coronavirus spread has greatly impacted the multifamily short-term rental market, with lost revenue associated with cancelled events and potential customers having to abide by essential travel and stay-at-home orders across the U.S.
By the start of 2020, Frontdesk had expanded to nearly 30 cities with over 500 rentals. In January, the company disclosed through U.S. Securities and Exchange Commission filings that it closed on $2.66 million from five investors toward a total offering amount of $4 million.
In August of 2019, Frontdesk closed on a $2.75 million funding round that included investment from Milwaukee's La Macchia Holdings, Silicon Valley's Sand Hill Angels and Chicago's Motivate Ventures, in addition to existing seed round investors. Frontdesk planned to use the capital to expand its digital property management platform and add additional data analysts, web developers and digital marketing personnel.
Marc Lasry, co-owner of the Milwaukee Bucks, invested $250,000 in Frontdesk in 2018. Lasry's investment in 2018 was part of a $750,000 round of funding that was led by Madison-based venture capital firm Lancaster Investments.
