The first property and technology company to manage premium second homes in non-urban destinations
Business overview
| Location | Genève, Switzerland |
|---|---|
| Social media | |
| Website | emeraldstay.com |
| Sectors | Property Mixed Digital/Non-Digital Mixed B2B/B2C |
| Company number | CHE-420.659.492 |
| Incorporation date | 30 May 2017 |
Business highlights
- 100% renewal of contracts from our hosts (0-churn!)
- Generated €1.4m revenue in 2020
- €150M+ in assets under management
- 4.6/5 guest satisfaction in 550+ reviews
Learn more about convertible campaigns.
Idea
Introduction
Second home ownership is on the rise, especially in non-urban destinations.
The vast majority of owners today intend to rent their second home when it’s vacant.
While “Airbnb do-it-yourself” (1) immediately comes to mind, this isn’t an option for many owners, especially in the premium end. In fact, the majority of properties on Airbnb are now managed professionally. Yet, the property management industry is still stuck in the 90’s: highly fragmented, with low customer satisfaction, and very little digital penetration, making it an ideal candidate for disruption.
Meet Emerald Stay.
The first property and technology company focused on managing premium second homes in non-urban destinations. We launched operations in 2018 and now manage properties worth a total of €150 million. Present in 8 destinations across 3 countries and 2 continents, we are the proud market leaders in our home markets in the French Alps.
Our mission is to transform the future of second home ownership.
(1) this includes others like Homeaway/VRBO, Booking.com.
Substantial accomplishments to date
2018:
🚀 Launched in 1 winter destination in the French Alps
👩🏻💻 Developed our proprietary API connecting to multiple third-party and in-house apps
💶 Raised a €180K seed round from Angel Investors
📈 Generated €560k revenue*
🏡 Inventory of 100 beds
2019:
🚀 Launched in 2 new destinations in the French Alps and 1 in Morocco
👩🏻💻 Launched our booking engine and proprietary automated pricing model
💶 Raised a €600K seed round
📈 Generated €1.2m revenue (+114% growth)*
🏡 Inventory of 130 beds
2020:
🚀 Launched in 2 new destinations in the French Alps
👩🏻💻 Developed the owner’s app where owners can see bookings, reviews, and invoices
💁🏼♂️ Hired a new CTO with 15 years of experience leading technology teams
📈 Generated €1.4m revenue (despite covid)*
⤴️ Increased net income by €350k YoY*
🏡 Inventory of 390 beds
🤝 Signed contracts or partnerships to enter 5 new destinations, including the French and Swiss Alps, St Tropez, Spain, and Andorra
❤️ Achieved 4.6/5 rating on 550+ public reviews
🛠 Based on the number of nights booked, we estimate that we have created a potential of one thousand jobs across our locations
🗞 Was featured in international press including:
🏡 Monthly inventory growth since inception:
*Based on unaudited management accounts
Monetisation strategy
Emerald Stay enters exclusive relationships with owners of premium homes in non-urban destinations and finds the best use of the space, from short-term to mid-term rentals, capturing renters from all sources. We then manage all aspects of the experience, both online and offline, and share proceeds with the owner.
✅ Our unit economics are profitable:
๏ On average, after an initial 12 months “ramp-up” period, a property generates €80-100k gross revenue per year
๏ We make a 35% operating margin. ie €28-35k per property per year*
🌎 Our model is scalable:
๏ Our use of technology allows us to have 55% lower costs than hotels
๏ Our focus on guest experience fuels brand recognition and repeat business, making our satisfaction rates exceed industry standards by 2.5x
๏ We have no marketing spend, yet our direct bookings average 40%
๏ We outsource on-demand amenities and automate processes related to pricing, distribution, logistics, and maintenance, thanks to our technology
Use of proceeds
We are on a path to expand our market share and become the leaders of the highly fragmented, low-tech market we are in. The timing of our raise coincides with an economic backdrop that gave us the opportunity to accelerate our growth even further.
🚀 This is why 70% of raised funds will be allocated towards growth.
First, a bit of context: our growth model requires upfront funding, yet generates a high ROI. This is because adding a home to our portfolio requires an upfront cost of €2.6k to €3.7k, but after 12 months, generates €28-35k per year in contribution margin, on average.
We plan to add inventory in 3 new destinations in the French Alps, and in new markets that we already have signed contracts for in Switzerland, Costa Brava, Andorra, and French Riviera.
👩🏻💻 The next 15% of funds raised will be allocated towards tech product development to further increase operational efficiency and better user experience.
👩🏽💼👨🏼💼 The remaining 15% will cover the portion of head office salaries that won’t be covered by our contribution margin until we reach profitability.
We believe in changing the future of second home ownership.
Join the movement.
Investor perks
As investors, you are supporting our growth and are part of our journey. To show you our gratitude we will give you two gifts:
1️⃣ 20% of your investment back as booking credits. This means that if you make a €5,000 investment, you will not only own a share of our business; you will also get to enjoy one of our beautiful homes at a discount (or for free!). You will just have to book with us on emeraldstay.com/destinations and use your credits towards your stay.
2️⃣ For any investment above €5,000, you will become an Emerald Stay Club Member. We will be waiving the €400 annual fee (forever) and allowing you to enjoy an UNLIMITED number of 50% discounts on ALL our homes and destinations during off-peak months:
- April to July & September to December for winter destinations
- October to June for summer destinations
Yes, you read it right! Apart from becoming one of our investors, we’d love you to join us as a guest! And if you own a home in one of our destinations, we will be more than happy to review the opportunity to partner with you.
Please be reminded that credits will have to be used before 31st December 2022 and the maximum credit amount will be EUR 10,000 for an investment of EUR 50,000. The credits will not cover cleaning fees. Other Terms and conditions may apply.
Please note that any discounts and/or offer listed by a company in its campaign are subject to the terms and conditions applied by that company. It is the company's responsibility to honour such discounts, rewards and/or offers and Seedrs does not take any responsibility for them.
Key Information
Advance Subscription Agreement - Key Terms
This investment round is being raised by way of a convertible equity investment structure, in this case, an 'Advanced Subscription Agreement'.
The key terms that apply to the Company’s advanced subscription agreement are set out below. See also attached Key Terms document for further details.
Discount – 20%
Valuation cap and default valuation - EUR 8,000,000.
Conversion is triggered by:
(1) An Equity Fundraise – defined as the Company raising investment capital of at least EUR 1,000,000 from one transaction or a series of transactions, in exchange for the company issuing the most senior class of shares;
(2) A Change of Control of the company (transfer of more than 50% of the share capital) or IPO
(3) Longstop Date -12 months from the date of the Advance Subscription Agreement.
(4) Winding up event.
On conversion upon an Equity Fundraise, Change of Control or IPO, the convertible will convert into the highest class of shares at the lower of (i) a 20% discount to the price of the relevant trigger event and (ii) the price a share would be if the pre-money valuation was equal to the Valuation cap.
On conversion at the Longstop Date or on a winding-up event, the convertible will convert into the highest class of shares at the lower of:
(i) the lowest price of any shares issued after the advance subscription agreement is signed; and
(ii) the price a share would be if the pre-money valuation was equal to the Valuation cap.
Outstanding debt
The company has been granted, over the course of 2020, a total of EUR 285,000 covid-19 relief loans:
1. EUR 60,000 loan to be repaid over 5 years from June 2022.
2. EUR 95,000 loan to be repaid over 5 years from October 2022.
3. EUR 130,000 to be repaid as a lump sum payment in April 2025.
These loans carry a fixed interest rate between 0% and 0.25%.
None of the funds raised will be used to repay these loans.
Outstanding convertible loan
The company has a CHF 200,000 (~EUR 184,320) convertible loan from Apeiron Investment Group Ltd. The Company has agreed with the lender that this loan will convert on the same terms as this round.
Share classes
The company currently has only one class of shares, ordinary shares, but has contractually agreed 1x non-participating preference rights for certain existing investors. On an exit or liquidation, these investors will receive the higher of (i) proceeds equal to their initial investment and (ii) their pro rata share of proceeds based on shareholding, before proceeds are distributed to all other shareholders.
On conversion of the convertibles issued in this round, the company intends to formalise this preference and create a class of preference shares with a 1x non-participating preference. Investors in this round will be issued the highest class of shares on conversion.
Phantom shares
The Company has a phantom share plan of 1.86% of the equity of the company. This is intended to be granted to its employees, directors and consultants, for them to be compensated for their contribution to the long-term growth and profits of the Company. These shares entitle their beneficiaries to conversion proceeds in cash, without the possibilities to convert them in common shares of the Company nor receive dividends.
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