Star Tech: How Silkhaus reimagines short-term rentals in the region

Medium and long-stay travel across high-growth emerging markets get a digital makeover

Joydeep Sengupta

Published: Fri 18 Nov 2022, 8:50 PM

Silkhaus, a Dubai-incubated prop-tech, aims to disrupt the short-term rentals (STRs) market across the Middle East and North Africa, South Asia, and Southeast Asia.

“For the uninitiated, Silkhaus is a paean to Silk Route across Asia, and the nomenclature is inextricably linked to our expansion plans across the continent,” said Aahan Bhojani, founder and Chief Executive Officer (CEO), Silkhaus, who was born and raised in Dubai and calls the UAE his “home for the past 30 years”.

The alumnus of Dubai International Academy, Emirates Hills, had an epiphanic moment when he returned to Dubai on March 13, 2020, and got stuck during the first wave of the Covid-19 pandemic.

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Bhojani, who holds an undergraduate and MBA degree from Ivy League schools such as Yale College and Harvard Business School, respectively, was working in Boston and his visit to Dubai amid the onset of the pandemic turned his world — like millions of people across the globe — upside down.

“I was committed to a 12-month lease in an apartment in Boston, even though I couldn’t go back to my pad for months because of lockdown restrictions and suspension of flights,” he recalled.

That was the germinal idea of SRTs and alternative accommodations, which could be a game-changer for both lessors and lessees.

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Bhojani’s past experiences include a US-based travel tech company, where he developed an easy-to-use travel management tool that makes managing corporate travel easy, fast, and agile. As the product head it was natural for him to imagine an ecosystem such as Silkhaus, which was launched in September 2021 in Dubai to digitally aggregate STRs.

Value proposition

“We build technology and tools to empower any individual — be it a real estate owner, an institutional asset owner, or an emerging property manager — to operate high-quality STRs. Our value proposition has struck a big chord with Dubai, which introduced STRs only four years ago and is known to diverse audiences as a melting pot of over 200 nationalities and a hyper-fragmented ecosystem of operators. Data shows that our revenue has grown 10x since our launch owing to a critical gap in STRs in Dubai,” said Bhojani.

Bhojani, who earned his MBA from Harvard Business School in 2019, has a rich and varied work experience, despite the few years he worked as a professional in the US and back home in Dubai.

He has worked in technology investment banking with Barclays Capital on Wall Street; management consulting with Bain & Company in Dubai and did an externship with the UAE Prime Minister’s Office. These experiences have allowed him to widely travel in the region and globally and get a sense of business travel accommodation that “may exude luxury but lack personalised comfort and freedom”.

A common refrain among inveterate travelling professionals has been that often, what you see is not what you get, while booking online on aggregator platforms.

Making seed round history

Silkhaus has raised a $7.75 million (Dh28.47 million) seed round to digitise STRs across emerging markets. It is one of the largest seed rounds in the history of the Mena region and has shaken up the STRs’ segment in Dubai since its launch 14 months ago.

Silkhaus’ investors include leading global venture capital funds, technology funds, real estate funds, and the strongest entrepreneurs across emerging markets.

Global and regional investors joining this round include Nuwa Capital, Nordstar, Global Founders Capital, Yuj Ventures, Whiteboard Capital, and VentureSouq. International family offices, business leaders, and several global prop-tech entrepreneurs have also joined this round.

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Powering ease of doing business

Bhojani vouched for the ease of doing business in Dubai.

“We build technology that allows asset owners to distribute inventory universally, automate pricing, optimise revenue, and access new segments of demand for STRs, including enterprises,” he added.

Property owners are allowed to list multiple or single units on the platform with an average revenue yield increase between 20 and 40 per cent. Guests can easily access high quality, well-maintained properties, elevating their experience, whether they are travelling for business or leisure.

The demand for high-quality STRs has far outstripped supply as more professionals relocate to the UAE, on the back of progressive regulations and visa reforms that are attracting top global talent and companies to its shores. The rising trend of ‘global nomads’, professionals who are able work from anywhere and require transparent, yet flexible, tenancy contracts has also fuelled demand.

Silkhaus lists high-grade accommodation options, located in proximity to central business districts and leisure destinations. Multinational companies (MNCs) also choose Silkhaus for qualified long-stays for their employees. The company focused on assembling the best talent from the global start-up ecosystem, attracting leaders from Microsoft, Airbnb, Deliveroo, Careem, Talabat and other global tech-enabled businesses.

The start-up has employees from 12 nationalities on its rolls, including women comprising around 40 per cent of its team.

The road ahead

Silkhaus has identified a $13 billion (Dh47.75 billion) total addressable market (TAM) across Mena, South Asia and Southeast Asia to unlock opportunities for asset owners and is likely to grow to $18 billion (Dh66.11 billion) by 2026.

For property investors, STRs offer flexibility in maximising returns on their investments in a red-hot market, without being locked into long-term tenancy contracts. While demand for STRs has been aggregated by online platforms, the supply of STRs still remains hyper-fragmented and largely offline in nature.

“The vision is to empower an individual to operate high-quality STRs globally, and to institutionalise this asset class for real estate owners and professionalise experience for end-users. We’re flexible regarding duration of stay, personalised experience from an end-user perspective and also agnostic of price points” Bhojani added.