WhyHotel, a company that works with developers to turn newly built unleased luxury apartments into hotels, is set to expand thanks to a new capital raise.
The company announced this week that it raised $10 million in its Series A funding round. The news comes just a few months after the company raised just shy of $4 million in its seed funding round.
WhyHotel sets up shop in luxury buildings with 100 or more unleased apartments and creates a full-service hotel within the property using those unleased units as hotel rooms.
The hotels are temporary, and as lease-up continues, WhyHotel gradually decreases its presence in the host apartment community, ultimately leaving when lease-up is complete.
The company has been growing over the last few months and attracted several new investors in this funding round. The capital raise was led by Highland Capital Partners, with participation from Camber Creek, Revolution's Rise of the Rest Seed Fund, Mendacre, MetaProp, and Geolo Capital.
According to the company, it plans to use the new funding to launch new pop-up hotels, beginning with three locations in Virginia, and to continue expanding nationwide throughout next year.
The company said it will also use the funding to hire new employees.
WhyHotel is a spinoff of Vornado Realty Trust, which developed the concept from within its strategic projects division.
The company’s first efforts were with Vornado properties, but since then, the company has expanded and partnered with other operators as well.
“The WhyHotel concept of turning brand new, yet to be leased luxury apartment building units into temporary hotel suites has seen great success with consumers in the areas we have launched so far,” said Bao Vuong, president and co-founder of WhyHotel. “It is for that reason that we are continuing our rapid expansion to bring the WhyHotel experience to additional metros and we are grateful to have received the funding to do so.”
In addition to expanding beyond the east coast and going nationwide, WhyHotel also will also look to open new pop-ups in the cities the company currently operates in, to create a permanent presence in those cities despite individual locations ending their temporary programs, the company said.
“WhyHotel provides a better product and a better customer experience to business and leisure travelers for their short-term housing needs,” said Craig Driscoll, partner, Highland Capital Partners. “The WhyHotel team has taken a leadership position in helping modern cities and leading property developers provide visitors with a more flexible and cost-effective housing option. We are proud to be partnered with the WhyHotel team on this journey.”