Cosi, a new Berlin-based startup operating in the hospitality space with an alternative to boutique hotels and managed short-stay apartments, has picked up €5 million in seed funding pre-launch.
Leading the round are venture capital firms Cherry Ventures and e.ventures, with participation from a number of travel, real estate and hospitality entrepreneurs and experts. They include Nils Regge (founder of HomeToGo and Dreamlines), Gleb Tritus (MD Lufthansa Innovation Hub), Manuel Stotz (founder of Kingsway Capital), Mato Peric (founder of Immo), Andreas Brehmke, Loric Ventures, and Lions Venture.
That’s quite a line up for a company that won’t launch for another few months, but is no doubt based in part on the track record of Cosi’s founders.
They are Christian Gaiser, the startup’s CEO, who preciously founded Bonial.com, the local shopping platform sold to Axel Springer in 2011; Dimitri Chandogin, who co-founded Doc+, a prominent digital healthcare provider in Russia; and CTO Gerhard Maringer, who has a background in fintech and previously built ForexFix, an FX hedging platform.
“More and more guests prefer to stay in a unique apartment versus a boring hotel, i.e. travelers tend to book their stay at a private host via Airbnb. [However], the experience can be frustrating though due to lack of quality and service: long check-in/check-out times, poor interior design, lack of cleanliness, not enough linen, no service hotline in case of questions, to name a few examples,” Gaiser tells TechCrunch.
“Many guests, therefore, decide not to stay in a unique home for quality reasons. Cosi solves this problem as a full-stack hospitality brand: We control the entire guest journey from end-to-end”.
To offer a “full-stack” hospitality service that hopes to compete with well-run boutique hotels or traditional local managed apartments, Gaiser says the company signs long term leases with property owners, and then furnishes those apartments itself to “control” the interior design experience. “On top of that, we offer a digital service along the entire guest journey from initial contact to loyalty. Finally, we rent out our apartments short-term as a hotel replacement,” he explains.
That requires technology to drive “the entire value chain,” and Gaiser points out that the tech guests experience directly is only the tip of the iceberg. “Running a hospitality business requires a lot of tools in the background for housekeeping, maintenance, yield management, to name a few, that will create an efficiency edge for us,” says the Cosi co-founder.
With regards to target customer, Cosi broadly covers travellers that want the quality assurance of a hotel but appreciate the unique design and “coziness” of a personal home. More specifically, the company has two main target groups in mind: tourists that spend a few days in Berlin to immerse themselves in the local culture and history (“live like a real Berliner”), and business travellers that need to stay several weeks or months and are fed up with the traditional hotel experience.
“Cosi creates a new category, but the closest direct competitors include smaller boutique hotels or traditional local serviced apartment operators for tourists,” says Gaiser. “In a broader sense, we also compete with the big hotel companies like Marriot or Hilton in business travel”.
There are potential U.S. competitors, too, with Sonder and Lyric operating a similar model. “They might also look into Europe,” concedes Gaiser, “[but] it will be challenging for them to comply with local regulations and to establish real estate relationships. It is a very local game”.