JetBlue's corporate venture capital wing has already picked some winners in the short-term rental sector. That's some progressive thinking for an airline, and Frontdesk wouldn't mind bolstering that record.
JetBlue Technology Ventures, the airline’s corporate venture arm, deepened its foothold in the short-term rental sector with its participation in a $13 million financing round for Milwaukee, Wisconsin-based property manager Frontdesk.
Frontdesk, an urban-oriented property manager, plans to use the Series B financing to expand its presence in existing markets and multifamily buildings, with a goal of transitioning from managing a handful of units in a property to entire floors or buildings.
New investor Stormbreaker Ventures led the round, which brings Frontdesk’s total equity financing to date to $22 million, Frontdesk announced Tuesday. Likewise, JetBlue Technology Ventures and Veritas Innovations jumped in for the first time, along with existing investor Motivate Venture Capital, as well as strategic investors.
JetBlue Technology Ventures has a wide-ranging portfolio that has included several short-term rental-oriented targets, including TurnKey (acquired by Vacasa in 2021), Transparent (acquired by OTA Insight in 2022), and Frontdesk.
“At JetBlue Technology Ventures, we are always on the lookout for companies that are building differently from their peers,” said Jim Lockheed, investment Principal at JetBlue Technology Ventures, as part of the financing announcement. “Frontdesk’s vision to redefine hospitality for the modern traveler — grounded in strong business fundamentals — is exactly the type of business we believe will be a great partner for JetBlue Technology Ventures and our existing portfolio of early-stage startups improving the future of travel and hospitality.”
Frontdesk said it manages more than 1,000 units in around 160 buildings in 30-plus U.S. markets. The company, founded in 2017, has strength in so-called second-tier U.S. cities, including Milwaukee; Indianapolis, Indiana; and also Austin, Texas.
Co-founder Jesse DePinto, who became CEO of Frontdesk at the beginning of the month, replacing co-founder Kyle Weatherly, who remains as a director, said Frontdesk is transitioning from a “land to an expand strategy.” In other words, it will try to manage whole floors and buildings versus perhaps five or six units at a property.
The business model with owners remains the same, he said, namely a revenue share between Frontdesk and building owners, as well as Frontdesk collecting a management fee, DePinto said.
He argued that after the initial phase of entering a city and building relationships with owners until now, Frontdesk is well-positioned to take over management of entire multifamily buildings, and thus to service both short- and long-term renters.
In a Skift interview in August, DePinto characterized his company as a “financially prudent Sonder,” referring to the public company property manager that has generated a lot of red ink and press. He said Frontdesk has been picking up properties from peer property managers that have ceased operating. These include Wanderjaunt and Stay Alfred.
“As the world becomes more digital and more flexible, the need for our product has never been greater,” said DePinto in Tuesday’s announcement. “We are grateful to be joined by partners who support our vision to power the future of dynamic living and meet the contemporary needs of living, working, and traveling. As we look towards the future, we are now even more excited about the generational opportunity ahead, and Frontdesk’s leadership position within our category.”
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Photo credit: A short-term rental apartment with hotel-style amenities bookable in Columbus, Ohio, from Frontdesk-managed vacation rental. The company secured additional financing. Frontdesk