The start-up Homelike finds furnished apartments for business travellers looking for a temporary base. The idea behind their booking portal was inspired by countless corporate trips abroad. The story of how a company was founded.
About the team
Dustin Figge (r) and Christoph Kasper met at a business conference and found out that they shared the same dream: to set up their own business. In 2014, they launched the portal Homelike, a professional apartment provider for business travellers.
The Homelike logo is emblazoned on the wall in huge letters above a couch, rug and some beanbag chairs. Staff here can make themselves at home while they're at work. It's the perfect atmosphere considering this is what the Cologne-based start-up is all about: finding people a temporary home.
The idea behind the business was sparked by the personal experience of the founders Dustin Figge and Christoph Kasper. Both travelled a lot for work and repeatedly found themselves confronted with the same disappointing living situation, regardless of whether they were in Spain, China or the USA. If you're staying for the long term, small hotel rooms are pretty uncomfortable and rather expensive. Adverts for furnished flats are often very local and do not tend to be digital, making the search for somewhere to stay correspondingly tiresome.
In 2013, Cologne-born Dustin Figge once again found himself being dispatched to yet another far-flung corner of the globe for his job. Working for Bertelsmann, he had just moved to Palo Alto in Silicon Valley. After starting out in a hotel, he then moved into a small apartment. Figge remembers this time all too well: "The flat was so small; I could have fried an egg in the kitchen straight from my fold-down bed."
Silicon Valley, the place where everyone wants to be. However, I wasn't as happy as everyone else. I wanted to do something that I was 100% passionate about," says the 31-year-old.
It was around the same time that Christoph Kasper also felt like he wanted to make some changes in his life. Mr Kasper had been working in the business world for a long time, too, and was managing operations at the career network Squeaker at that point. However, his goal had always been to launch his own start-up. Mr Figge and Mr Kasper had met a few years earlier at a business conference. They remained in touch, became friends and, at some point, found out that they shared similar dreams.
They turned their dreams into a reality in the winter of 2013/2014. Christoph Kasper boarded a plane to San Francisco, where the two young men began hatching a plan. Their endless nights in anonymous hotels for work eventually led to them to a business idea: a professional accommodation portal for business people. "We thought about everything. There was not a single reason why not to do it. And yet, there were so many reasons why we should," explains Mr Figge. "So, we quit our jobs and set about building our business."
The two entrepreneurs' start-up fills a niche in the market. Unlike other major portals like Airbnb or Wimdu, who link customers directly to flats, Homelike is part of the Business-to-Business (B2B) sector. Home owners rent their furnished apartments to companies looking for accommodation for their staff. The Homelike platform acts as the intermediary, processes the bookings and guarantees the quality of the apartments on offer. According to the managing directors of Homelike, this is a win-win situation as the tenants – i.e. the companies – save around 50 per cent when compared to hotel costs. The owners, on the other hand, have less to deal with because they can now rent on a monthly basis instead of a daily one. This is because Homelike only allows users to book apartments for a minimum of 30 nights.
Another key difference to other platforms is that anyone listing their property on Homelike does so in a professional manner and also has the option of issuing invoices – unlike the private landlords on Airbnb and co. This is a clear advantage for businesses as it is the only way that allows them to book their employees' accommodation costs into their accounts. Homelike mainly works with large providers who own a number of properties or who have even specialised in the rental of furnished homes or run boarding houses, for example. A few apartments provided by private owners are still left over from the company's early phase but even these flats are subject to the Homelike standards. Sub-let private flats and rooms in flat shares are not included in the Homelike range.
Dustin Figge recruited his first developer while he was still over in San Francisco. Meanwhile, Christoph Kasper was starting to pull things together in Germany. Mr Figge then returned to Germany in July 2014. Homelike was to become their new home in their old home city of Cologne.
They set up their first desk in an office in the old Gerling headquarters, a snazzy 1980s-style place with wood panelling on the walls. In the months that followed, they both lived off their savings. Homelike first launched in 2015 as a minimal version of the platform, known in the industry as the minimum viable product (MVP). They started out with almost 1000 flats in four German cities. "Our strategy was always to create a product that works and generates turnover. Only once we had achieved this would we start looking for investors," said Mr Figge.
To achieve this, the founders had to roll up their sleeves and muck in, too. One of the first apartments, an 18 m2 flat on Cologne's Hansaring road, was furnished by Mr Figge and Mr Kasper themselves. The unfurnished flat had attracted the interest of a business man. Without further ado, the Homelike CEOs set off for a furniture store, buying and setting up all the furnishings for the flat. "It was pretty stressful. Our start-up was even briefly on the brink of collapsing that weekend," says Mr Figge. "Nevertheless, it was also an incredible experience to learn everything we needed and to get a taste for the market."
Nowadays, Homelike has specific criteria for the apartments it offers. They must be self-contained flats; in other words, not a room in a flat share or a room with a shared bathroom or kitchen. What's more, they have to be ready to move straight in to, so they need crockery, cutlery, full furnishings and WiFi. The young entrepreneurs pay close attention to quality, which is why all apartments and owners are verified by the Homelike operations team before they can be advertised online. This is a laborious process and can take 24 to 48 hours as Homelike also visits the apartments.
The company generated its first returns not long after its launch, which led Dustin Figge and Christoph Kasper to go on the search for investors. The concept was proving impressive, with the entrepreneurs managing to attract angel investors from the tech sector, financial planning experts and real estate investors. "I was not keen on asking my friends if they wanted to invest as start-ups can be very risky. We wanted to find people who could provide expert support," explains Mr Figge. They were expanding their network and a second financing round followed.
The entrepreneurs won't divulge how much capital they raised. But let's just say that their investors include Coparion, a venture capital investor. Coparion is a co-investment fund between KfW and the Federal Ministry for Economic Affairs and Energy (BMWi) and invests in innovative start-ups and young technology companies as an independent company. David Zimmer, Managing Director at Coparion, was won over by Homelike's concept straight away. "We predict strong growth in the market for furnished apartments and long-term lets are particularly in demand in the B2B sector. This is precisely where Homelike comes in. But that's not the only thing. The two founders are also a strong team that has already made major progress on the market with very little capital."
They have since made so much progress that their old office in the Gerling headquarters is long a thing of the past. Homelike have been based at Cologne Mediapark since early 2017. Over 40 employees now work in a space of around 500 square metres. Glass panels separate the office from the outdoors and the corridors. The architectural design is as open as the company itself, with flat hierarchies, direct responsibility among staff and both bosses right at the heart of the team. The entrepreneurs at Homelike transported the Silicon Valley spirit to Cologne. It is therefore no surprise to learn that they are about to take their tech team on a week-long surfing break – perfectly reflecting the company's value of "optimize for happiness".
These days, Homelike lists around 20,000 apartments in 60 cities across four European countries. However, it's not going to stay this way. "Expanding to other countries is not the main thing for us; it's expanding to other cities. There are several attractive cities in Europe, such as London, Liverpool, Madrid or Barcelona," explains Mr Figge.
It will be an exciting few years for the Cologne-based start-up. The two young founders have plenty of ideas of how they'd like Homelike to progress – and how they would like work again at some point: "In San Francisco, we would work in cafes all the time. I love the coffee-shop atmosphere. That is another dream of Christoph and me: an office that is set up just like a cafe."
Published on KfW Stories: Tuesday, 1 August 2017