Venture capitalists including famed hotelier Barry Sternlicht have invested in a San Francisco-based company that’s aiming to take on Airbnb.
AJJK Inc. is the name of the company, which has landed $15.5 million in a series A round of funding that also saw the participation of Fifth Wall Ventures and New Enterprise Associates, the Wall Street Journal reported. AJJK said it’s planning to rename itself as “Lyric” soon, in order to create an “upscale rental brand” similar to four or five star hotels, within multifamily buildings.
Lyric’s idea is that it will convince developers to set aside a few units in their new apartment buildings for short-term rentals. Airbnb launched a similar to program to this in 2016 called the Friendly Buildings Program that allows developers to list rental units on its site. Airbnb says more than 13,000 such units have been listed. However, Lyric wants to differentiate itself by being more of an amenity within a luxury rental, allowing guests to feel more like residents than mere guests.
“If somebody creates a successful business model, plenty [of multifamily landlords] will adopt it,” Conor Wagner, an analyst with real estate research firm Green Street Advisors, told the Journal.
Still, significant obstacles lie in Lyric’s path. In New York City, for example, short-term rentals of fewer than 30 days are illegal in buildings with three or more units, unless the owner is present. The hotel industry is also a fierce opponent to services like Airbnb.
Lyric is aiming to have 1,000 units by the end of this year.