Former Airbnb Execs Back Subletting Startup in NYC

Ezra Gershanok and Jacob Halbert had made almost nothing in sales for their apartment subleasing startup until this spring. 

Then, they say, the platform got 1,000 new listings in New York City in just two months, and sales jumped to $1.2 million in May. The founders believe the growth spurt stems from Local Law 18, new regulations enacted last fall around short-term rentals.

The startup, called Ohana, is meant to connect hosts and guests for the mid-term rental market, defined as stays between 30 days and 12 months. The platform facilitates an introductory video call between the parties, along with a sublease agreement and payments. 

“The reason we had crazy growth in the spring is because there’s so many people that come to New York City for the summer, and Local Law 18 brought us a lot of supply,” Gershanok said from an apartment in Hell’s Kitchen that the founders are renting through Ohana. “New York City kind of needs this. They need a new legal sublet market, and there’s 16,000 Airbnb hosts that aren’t using Airbnb anymore that need an alternative.”

Local Law 18 requires that New York City short-term rental hosts register their listings, which must be for a bedroom within a unit where the host lives. The reservations must be for fewer than 30 days, and the host must be present during the stays. 

Meanwhile, all hosts are still permitted to book stays of 30 days or longer, whether they are registered or not. 

That meant some hosts started converting their short-term rental apartments into long-term stays. But with concerns about squatters, Gershanok said hosts prefer more vetting than what Airbnb offers for longer stays.

For consumers, it’s safer than finding something on Facebook Marketplace. And the founders believe that consumers generally don’t consider Airbnb for mid-term stays. The jump in business came from word-of-mouth between interns that were moving to New York City for the summer, Gershanok said.

Other clients are businesses, including Wells Fargo and Duolingo, that need short-term housing for summer interns, along with digital nomads and transplants that want to sublet while searching for a long-term lease. 

Ohana Raises $3 Million From Former Airbnb Execs 

With improved financials, the Ohana founders in May set out to raise a seed round of funding. 

It only took one week.

Ohana raised $3 million in an oversubscribed round led by Wave Capital, which was founded by Sara Adler, former head of corporate development of Airbnb, and Riley Newman, former head of data science of Airbnb. 

Adler is joining the Ohana board. 

Adler declined to invest in Ohana’s pre-seed round last year, but she was impressed with the progress.

“We got really excited about the specific window and niche that they’re starting with because I think that their approach is very different from some of the other players, and I think makes a lot of sense from a safety and trust perspective for hosts and guests,” Adler said.

“We have the ability to move quickly when we get excited, and especially because I’ve met with them before and we know this general market pretty well.”

Other investors in the Ohana round included:

• Spencer Rascoff, co-founder and former CEO of Zillow
• Surabhi Gupta, former director of engineering at Airbnb and Robinhood
• Lex Bayer, former head of payments for Airbnb
• Eric Lefkofsky, co-founder of Groupon and managing director of venture capital firm Lightbank
• Ali Partovi, CEO of venture capital fund Neo and former investor of Airbnb

Ohana was founded in 2023 with $1.2 million in pre-seed funding from startup accelerator Neo. That round took 12 weeks and 108 meetings before it closed, Gershanok said.

“It’s whether you’ve found product market fit. Because if two guys are doing over a million in payments a month, that’s a pretty low-risk investment from a seed perspective,” Gershanok said. “Before we found product market fit, it was very hard to raise. Once we had clear traction, it was really easy.”

The seed funding will go toward hiring up to eight people, as well as growing in New York and later expanding in London and San Francisco. 

How Ohana Works 

Gershanok and Halbert previously worked together as founders of The Keyper, a pocket that attaches to the back of a mobile phone and stores dorm ID cards and keys. The venture sells about 100,000 products each year at 800 bookstores. 

They saw an opportunity to create Ohana after a tough time finding short-term housing for internships. 

Finding midterm housing on Facebook and Craigslist can be cumbersome, and there are countless scams through those platforms. Often, victims pay hundreds of dollars for a deposit on an apartment that doesn’t exist. 

“So many people are scammed,” Halbert said. “It’s really the Wild West in between Airbnb and the 12-month lease.”

Through Ohana, Hosts aren’t paid until after a guest successfully moves in. And Ohana holds the security deposit until seven days after the guest departs. Ohana uses fintech company Stripe to handle payments. 

The host sets the price, and then Ohana raises it by 5% and takes that cut. The final price is listed on the website. 

The contract agreement includes an indication that the host has permission from the landlord to sublease the space. 

Most clients are individual tenants or have two or three apartments. One client has 70 units and decided to contract Ohana to more easily connect with summer interns. 

They said the prices on Ohana are below market rate, which they believe is because of the increased supply of mid-term sublets.

Since March, Ohana clients have been renting one-bedroom apartments for roughly 11% cheaper than the average lease price of $3,789 per month, according to data from Apartments.com. Two-bedroom and three-bedroom sublets are selling under market rates, as well, according to the same data.

Based on those calculations, Ohana says it has saved roughly $1.6 million in rent for more than 600 people since March.