Lyric raises $160 million in debt and equity to power the next generation of hospitality
Lyric, a platform for folks who struggle to decide between a hotel and an Airbnb, has today announced the close a $160 million financing round (an even combination of debt and equity). Airbnb led the equity financing. Other investors who participated in the financing include Tishman Speyer, RXR Realty, Obvious Ventures, SineWave, Dick Costolo, Adam Bain, as well as existing investors Barry Sternlicht, NEA, SignalFire, FifthWall and Tusk Ventures.
Lyric is a hospitality platform for business travelers. The company secures its own inventory in multi-family residential buildings through partnerships with landlords. From there, the company brings in its designers to beautify the place and pack it full of amenities, including coffee from a local roaster and a fully functional kitchen.
You can think of Lyric as a premium operator,” said cofounder and CEO Andrew Kitchell. “We do everything from selecting locations to bringing in a brand and design team to managing every single room every single day. We’re a modern hotel operator with a meaningfully different supply.”
The startup uses a proprietary app called Tidy to manage room cleanings. The app not only walks cleaners through the process of getting a rental ready for the next customer or day, but also has them take photographs to verify that the room is up to standard. Cleaners are not employed in house, but rather Lyric partners with local vendors for room cleanings and maintenance. The company also uses tech to help determine what locations work best in a given city for a Lyric rental.
One of the biggest differences between Airbnb and Lyric is that Lyric is more of a premium hotel operator, putting the latter in lockstep with landlords rather than pitted against them. Lyric argues to landlords that it can be an anchor tenant in a new building, which means the landlord can avoid at least some of their inventory just sitting unrented. It can also be seen as an amenity for other tenants, who can put up their visitors at a discount on a different floor in their very building.
Here’s what Airbnb’s President of Homes Greg Greeley had to say:
At Airbnb, we have seen how hospitality entrepreneurs like the team at Lyric can help deliver amazing experiences and help guests feel like they can belong anywhere in the world. Lyric has combined the latest technology, strong partnerships with the real estate community and cutting-edge design, and we are excited to support their work.
This financing comes at an interesting time for the hospitality market. While Airbnb disrupts hotels, the lines are being blurred around what is a hotel and what is a rental. We’ve already seen big acquisitions in the space — see AccorHotel’s $170 million acquisition of OneFineStay — as well as big players enter it. WeWork launched a co-living product called WeLive in 2016.
Lyric is currently available in 13 markets and cofounder and CEO Andrew Kitchell says that the company is operating legally in every one of them. The company provides Studios, 1BR and 2BR units, with a starting price around $200/night, depending on the market.
With the new funding, Lyric hopes to expand its operations and go from its current 500 units across 13 markets to 1000 units by the end of the year. Lyric has raised a total of $185 million.