In its third investment to date, Milwaukee venture capital firm Gateway Capital Partners invested $300,000 in Houstr Inc., a Racine startup building a platform that enables short-term rental property and boutique hotel owners to sell products like mattresses, shower heads and flooring to their guests.
The platform allows property owners to create a digital storefront of products within their rental units. They can also sell services like mid-stay cleanings and experiences like tickets to local museums. As guests make purchases, both Houstr and the property owner can earn commissions.
The model is designed to help property owners earn extra revenue while creating guest experiences that can compete with larger hotels, give consumers try-before-you-buy opportunities and help brands get in front of potential customers.
"It’s a platform that creates value for everyone involved,” Gateway Capital managing partner Dana Guthrie said in a Tuesday statement.
Houstr recently launched an initial version of its platform. It has around 12 property owners on board that have already made sales, co-founder and CEO Nick Koenen said. Later this year, it plans to launch a pilot program with around 80 properties owned by Milwaukee short-term rental startup Frontdesk.
Koenen previously owned BoxDrop Racine Mattress Outlet and also operates Airbnbs. He had the idea for Houstr after he successfully sold more mattresses by placing them in his short-term rental units.
"The best product experiences happen in real life," Koenen told Wisconsin Inno. "My first year doing that I think I made like $2,100 selling mattresses to guests that slept on them."
Houstr co-founder Denis Ouspenski previously was a regular guest at Koenen's rental properties. What started as a friendship developed into an entrepreneurial partnership, Koenen said.
Koenen and Ouspenski are the only Houstr employees. They contracted with Green Bay-based digital product studio Headway LLC to develop the first version of Houstr's software, Koenen said.
Houstr's platform currently leverages Amazon's affiliate program and will soon integrate with a platform that will open up affiliate revenue opportunities with 150,000 brands and retailers, Koenen said. Houstr is using the funds from Gateway for development and marketing to attract more users, Koenen said.
Gateway Capital, which was formed through the state-sponsored Badger Fund of Funds, has a $13.5 million venture fund that invests in early-stage Wisconsin startups. It previously backed financial health tech startup Tip a ScRxipt and the health data company Geno.Me.
