Life House, a vertically-integrated hotel company, has secured $100 million in equity commitments (approximately $250 million–$300 million in total asset value) from Boston-based investment and development firm Blue Flag Partners to fund its continued, rapid expansion through the acquisition of seven to 10 additional hotels.
The announcement follows the news that Life House has taken over the operation of The Roberts Collection, a historic 58-room hotel in Nantucket, Mass., acquired by Blue Flag in April. This season, Life House is operating The Roberts Collection as part of its white-label, tech-enabled management platform and will begin restoration of the hotel in fall 2019, transforming the property into a locally-rooted hotel by Life House. The Blue Flag partnership provides fuel for Life House’s continued rapid asset-light expansion plans.
To date, Life House has raised $10 million in venture capital. Life House has leveraged its venture-backing from investors including Global Founders Capital, Comcast Ventures, and Trinity Ventures to develop proprietary technology that drives incremental revenue and automates operational efficiencies.
During its first year of operation, Life House has signed over 500 rooms across nearly 10 projects, spending less than $5 million of venture capital and positioning the company to raise a Series B this summer. By 2020, Life House will have over 20 hotels open or under construction across the United States, in markets including Nantucket, Brooklyn, Denver and Lake Tahoe.
Across its current portfolio of four operating hotels in Miami and Nantucket, Life House is driving between 50 percent to 80 percent of bookings direct to its website (representing a 200 percent to 300 percent improvement over a typical independent hotel in the U.S.), while increasing net operating income between 40 percent to 100 percent during the first year of operation.
In contrast to the growing number of apartment and short-term rental companies — which sign long-term leases and take on significant balance sheet liabilities — Life House is an asset-light management company that earns fees for designing and managing hotels. This business model is more similar to an enterprise SAAS product than a real estate product, making it an attractive venture for Silicon Valley investors.
