The Brno-based mid-term property renting platform Flatio yesterday merged with the Portuguese start-up NomadX, a rental marketplace aimed at digital nomads.
Founded in 2015 and 2017 respectively, the two start-ups have a combined value of nearly 11 million euros and will now combine their listings (Flatio’s 9,000 across 60 cities and 17 countries and NomadX’s 1,700 in Portugal alone) while expanding into new markets such as the United States, United Kingdom, and Brazil.
Together, the companies are hoping to thwart Airbnb’s advance into the increasingly lucrative and rapidly growing mid-term rental sector.
After discussions of a merger began in July, the two start-ups moved fast – in part because of the shifting attitudes toward working from home exacerbated by the Covid-19 pandemic. As many companies around the world warm to allowing their staff to work remotely, there is an increasing number of potential mid-term rental consumers.
With firms such as Twitter and Facebook now encouraging workers to stay home even in 2021, many traditional, salaried workers are for the first time able to work from anywhere in the world. This has sparked an interest into short- and mid-term month-by-month renting as workers look to break the lockdown boredom by working from different properties at home and abroad.
In Portugal, where NomadX is based, many landlords who previously relied on short-term holiday rentals are now looking at mid-term renting as a way to safeguard their income against a possible second wave of the epidemic. In Czechia, where Flatio is based, the company noticed a 111 per cent increase in landlord onboarding in March and 492 per cent in September.
Unlike other rental platforms, Flatio’s business model has proven stable through the pandemic. The company has recorded a 20 per cent growth in bookings year-on-year and a 100 per cent revenue increase in key cities.
While Airbnb has now entered the mid-term market too, by offering monthly rentals through its platform, Flatio’s CEO Radim Rezek is not concerned.
“Airbnb tried and failed to merge into the mid-term rental market four years ago, but their business model isn’t up to it, so we’re not worried,” he says. “Our business model is much more sustainable than Airbnb’s because we build and develop relationships with individual landlords, which make up 85 per cent of our inventory. We also safeguard our tenants by offering full contractual agreements in native languages.”
Both companies have fared quite well through the pandemic, even though NomadX has seen bookings stall somewhat due to travel restrictions between the UK and the US and Portugal, although its web traffic did double compared to pre-pandemic levels.
But NomadX founder Dave Williams is expecting a post-pandemic boom.
“At the minute, flights are still closed from the US to Portugal, except for essential business. And UK travel restrictions were recently enforced again meaning British citizens have to isolate for two weeks on returning from Portugal. But when markets start re-opening, especially with all the newly minted remote workers, we’re expecting to see a huge influx in bookings,” he explains.
As part of the merger all property listings will now be centralised on Flatio’s platform, while the NomadX brand will continue to operate powered by Flatio and expand to all Flatio markets. NomadX CEO Dave Williams will continue to run NomadX and will become a strategic advisor to Flatio.
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