Hotel startup Life House has secured a $100 million equity commitment to expand across the U.S. as it targets seasonal markets.
Life House CEO Rami Zeidan said the infusion will be used to buy up to $300 million of hotel properties in seasonal, upscale markets, like Nantucket, Massachusetts; Stowe, Vermont; Lake Tahoe; Jackson Hole, Wyoming; and Palm Springs, California. New York-based Life House made the announcement Friday.
The money is from Blue Flag Partners, an investment and development firm based in Boston. Blue Flag will own the hotels and Life House will design and manage the properties, Zeidan said.
Blue Flag’s current portfolio includes more than $250 million of residential, hotel and retail developments, according to a release. That figure includes the Roberts Collection, a 58-room hotel in Nantucket that Blue Flag acquired in April and Life House is running.
Life House works with investors to manage hotels with fewer than 120 rooms, and relies heavily on its technology that automates and consolidates back office operations. It plans to have 20 hotels operating by 2020. To date, it’s raised $10 million in venture capital and plans to raise a Series B round this summer, according to the release.
Life House already has five hotel properties in Miami. Four of those were recently purchased by Henley USA, an arm of United Kingdom-based private equity firm Henley.
Life House also has properties under development in Miami and New York, and plans to roll out similar partnerships with other investment firms like Blue Flag.
Life House is backed by venture capital firms Global Founders Capital, Comcast Ventures, and Trinity Investments. The company said it yields a higher return on hotel investments for its real estate partners than traditional management companies because its back-end technology that brings in more direct bookings.
Hotel and short-term rental startups are attracting significant investment. Sonder, a San Francisco-based startup, has a platform that leases apartments and transforms them into furnished short-term rentals. It just closed on a $210 million funding at a $1 billion valuation.