Investing in Tech-Powered Hospitality with Kasa
Kasa uses its proprietary hospitality operating system to manage accommodations on behalf of its enterprise real estate owner/operator partners. With Kasa, guests enjoy a digital-native, branded and consistent experience regardless of their length of stay, purpose of travel or type of accommodation (apartment unit, hotel room or vacation home). Real estate owners benefit from dramatically improved property profitability. The hospitality industry has supported the creation of over 100 companies with a market cap greater than $1 billion, and we at Citi Ventures believe that Kasa’s exceptional management team and technology-first, asset-light approach position it well to be a future proptech unicorn.
Kasa's technology ensures quality and consistency throughout the entire guest journey:
- Booking: Guests begin their journey on kasa.com or a distribution partner platform such as Airbnb or Expedia to search for and book their Kasa. The company seamlessly handles pricing, channel and calendar management across over 45 booking platforms, including the Global Distribution System. Kasa also handles identify verification and background screening to mitigate the risk of bad guest behavior, as well as payment processing, financial reporting and accounting.
- During the stay: Kasa’s tech makes the stay experience seamless and contactless. After receiving access management tools and check-in instructions via text, guests can communicate directly with Kasa’s guest experience team for additional needs such as housekeeping and extension requests. In its role as property manager, Kasa installs noise and smoke monitors to minimize the risk of trust and safety incidents and takes responsibility for cleanliness and maintenance.
- After the stay: Kasa collects and centralizes feedback across its properties to improve operations and tech for its entire portfolio. Inputs include guest feedback, operational data that tracks housekeeping and maintenance, and Internet of Things (IoT) data to measure guest occupancy.
Kasa partners with owners of properties across three asset types:
- Multifamily housing (MF): Via Kasa's tech, large operators of MF communities (i.e., apartment buildings) can use vacant units as short-term rentals (STRs) and provide high-quality experiences to guests while minimizing disruption to long-term residents.
- Boutique hotels: Kasa also partners with owners of independent hotels with fewer than 200 rooms, helping them replace non-essential cost categories with technology to meaningfully boost profitability. The consistency provided by the tech reduces the risks associated with bad guests, such as property damage and unauthorized parties, and increases operating income for the property owners.
- Single-family leisure (SFL): Lastly, Kasa has broken new ground in the burgeoning SFL industry, which offers single-family homes as short-term vacation rentals. In the most meaningful attempt we’re aware of to institutionalize the SFL asset class, Kasa recently partnered with private equity firm TPG to manage short-term SFL rentals in Florida — putting it at the forefront of one of the best-performing assets in real estate today.
All in all, Kasa's innovative operating system regularly improves property profitability by over 50% and uplevels property review scores meaningfully across a wide range of channels. Moreover, through its asset-light management agreements, Kasa is able to achieve software-like margins, stickiness, revenue visibility and scalability.
Kasa has continued to flourish during the most challenging proptech market of the last decade. That's due in large part to the team’s deep expertise in real estate and technology, with members boasting tenures at Airbnb, Apollo Global Management and Walton Street Capital. Kasa founder and CEO Roman Pedan was a real estate investor at private equity firm KKR — where he worked on hotel transactions across the U.S. totaling $1.2 billion — before he founded the company in 2016.
All this and more is why Citi Ventures, in partnership with Citi Spread Products Investment Technologies (SPRINT), is excited to announce our recent investment in Kasa’s Series C round, joining investors FirstMark Capital, Ribbit Capital, Zigg Capital, RET Ventures, New York Life Ventures and Fireside Investments. We look forward to supporting Kasa as it grows into a global hospitality brand tailored to the way people travel and live in the 21st century. Our congratulations to the entire team.