Kayak Co-leads Life House’s $60M Series C Funding

Life House Secures $60 Million in Series C Funding

Life House, a company specializing in software solutions for independent hotels, has successfully completed a $60 million Series C funding round. The investment was co-led by Kayak and Inovia Capital, marking a significant step in the company’s growth trajectory.

Investment Details and Company History

This financing round saw participation from existing investors including Tiger Global, Derive Ventures, Thayer Ventures, JLL, Trinity Ventures, Sound Ventures, and Cooley LLP. To date, Life House has raised over $100 million since its founding in 2017.

Founded by Rami Zeidan, who previously spent nearly a decade within the hospitality sector, Life House initially functioned as both a hotel brand and operator. The company developed its own software to optimize operations and ultimately aimed to become a leading operator in the independent hotel space.

Evolution to a SaaS Company

Life House is now transitioning to focus on directly selling its software to hoteliers and operators globally. This shift signifies the company’s evolution from a tech-enabled operator to a dedicated Software-as-a-Service (SaaS) provider with a team of 70 employees.

CEO Zeidan highlighted the company’s efficient spending, noting that over the past four years, they have operated with a budget of just over $20 million. The new funding will be instrumental in accelerating product development and innovation.

Kayak's Strategic Investment

The involvement of Kayak, a prominent travel website, as a lead investor is particularly noteworthy. Kayak’s CEO, Steve Hafner, expressed the company’s intention to “reimagine the hotel experience” in partnership with Life House.

Hafner stated that the investment will facilitate innovation and the expansion of Kayak’s hotel-related initiatives. He emphasized a shared vision of empowering independent hotels through improved technology, alongside recognizing Life House’s strong team and investor base.

Growth and Portfolio Diversification

Currently, Life House manages operations for approximately 50 hotels across North America. In January 2020, branded hotels comprised around 50% of the company’s portfolio.

Today, approximately 85% of its portfolio consists of third-party hotels utilizing Life House’s software through white-label agreements. The company is now actively marketing its SaaS products to hotels it does not directly manage.

Proven Results and Pandemic Resilience

According to Zeidan, the company’s software has consistently boosted hotel profitability by over 200% and increased net revenues by more than 45%.

Life House experienced over 600% growth since the beginning of the COVID-19 pandemic. The company aims to be a comprehensive solution for hotel ownership, creation, and operation, maximizing profitability for its clients.

Comprehensive Hotel Management Solutions

Life House provides support in areas such as revenue management, dynamic pricing, financial reporting, accounting, general operations, branding, and design.

Zeidan explained that the company’s primary focus is on delivering profitability and value to the real estate asset. Their platform is designed to directly improve profitability for hotels.

Targeting Small Hotels for Initial Expansion

Life House is initially concentrating on small hotels, recognizing a significant underserved market representing nearly half of all hotels. However, the company plans to expand its reach to larger properties over time.

Zeidan envisions a future where the company provides iPad-based solutions, starting with smaller hotels where rapid growth and minimal competition are achievable. He believes the software’s capabilities extend to luxury hotels, having demonstrated positive results across various property types.

Diverse Hotel Portfolio

The company’s managed hotels range in size from 14 to 375 rooms, encompassing a diverse range of properties, including a $2,000-per-night chateau and motels in the Midwest.

The Advantage of Being a Software User

Zeidan believes that Life House’s experience as a user of its own software has been a key advantage. This has facilitated a rapid feedback loop, enabling quick innovation and a deep understanding of hotel and guest needs.

Future Investment Focus

The newly acquired capital will be primarily allocated to hiring, with a focus on software developers, product managers, engineers, and expanding the sales team.

Inovia Capital’s Perspective

Pranit Tukrel of Inovia Capital highlighted the growing appeal of boutique and lifestyle independent hotels. He noted that limited technology adoption has often placed these hotels at a disadvantage compared to larger, branded competitors.

Tukrel believes Life House is uniquely positioned to address this gap by providing an end-to-end technology suite that delivers economic benefits to underserved independent hotels. He also pointed out that traditional hotel managers are less focused on this smaller segment of the market.