Short-term rental management startup Pillow has raised $13.5 million in new funding, and is launching a new product to provide more transparency to apartment owners when renters make their apartments available on platforms like Airbnb.
A few years ago, Pillow launched to help make renting out your apartment on Airbnb less of a hassle. That included things like helping hosts manage their calendar, set their pricing and dealing with the hand-off of keys and cleanings in-between guest stays.
But there were a few hassles many Airbnb hosts — or wannabe hosts — were unprepared to deal with, and those include aligning their desire to make extra income with the terms of their lease agreements and increasing local regulations around short-term rentals.
And that was causing Pillow to lose business. According to CEO Sean Conway, the biggest reason for customer churn wasn’t dissatisfaction with the service, but increasing crackdown from multi-family building owners against Airbnb and other short-term rentals.
So the company set about trying to come up with a solution that would work for building owners as well as apartment renters. The result is the launch of Pillow Residential, a new management platform for short-term rentals in multi-family apartment buildings.
Pillow Residential is designed to give building owners more transparency into what’s happening with short-term rentals on their property, and also allows them to share in the money being generated from rentals. The platform also ensures that apartment owners and renters are complying with local regulations, as more city governments create laws managing the frequency of short-term rental stays.
Basically it means that apartment owners no longer have to police the Airbnb or VRBO rentals that are happening on their property. Instead, they’ll offer Pillow Residential as an amenity to renters.
If you’re cynical like me, you might wonder what kind of an amenity it is to do what you **** well please with the apartment you’re renting out, but in many cases short-term rentals would be a lease or HOA violation, so ¯_(ツ)_/¯.
Anyway, the product allows building owners to know which units are being rented, and even to whom, giving them access to guest profiles; it also helps connect with background-checked cleaners. The whole thing is under the guise of community safety and not letting riff raff wander around buildings unchecked, so if there ever is a safety issue building owners can better deal with it.
And on the renter side of things, being in a Pillow Residential property means peace of mind that they won’t be kicked out if someone just happens to find out about their Airbnb side hustle.
Along with the new product, Pillow is announcing that it raised $13.5 million in new funding led by Mayfield, with participation from Sterling.VC, Peak Capital Partners, Expansion VC, Chris Anderson, Gary Vaynerchuck, Dennis Phelps and Veritas Investments. Because part of that funding is what you would deem “strategic,” investors are already on board with making Pillow Residential a success.
Pillow Residential has enrolled more than 5,000 units in places like San Francisco, Oakland, Denver, Eugene, Salt Lake City, Louisville and Albuquerque. It’s already working with apartment owners like Marian Group, Virtu Investments and Peak Residential, so you can expect that footprint to greatly expand to be available in more cities and buildings over the coming months.