Selina Raises $100 Million for Its Millennial-Focused Lodging
Selina has raised $100 million in fresh financing, the Tel Aviv-based blended hospitality startup said Wednesday.
Access Industries led the Series C round. Grupo Wiese and existing investors Colony Latam Partners also participated.
Selina runs a network of 46 properties in a dozen Latin American countries and Portugal. It offers private and shared accommodation with coworking facilities, cafes, wellness, and local experiences. An upcoming 126-bed property in the Chelsea neighborhood of New York City, for example, will feature a hotel that includes some hostel-like lodging, coworking spaces, eateries, shops, a year-round rooftop, and an art gallery.
Rattling the Incumbents
Selina has raised $225 million in funding since its 2015 launch by co-founders who came from outside of the hospitality sector. The startup said it had separately secured more than $300 million from regional partners to acquire real estate and fund its conversion costs for ongoing projects.
Historically, hotel companies rarely received investment from venture capitalists. Selina’s executives believe it’s unlike traditional players. They argue that most offerings today feel commoditized and inflexible to a few segments of millennial travelers, including so-called digital nomads.
“We provide an offering that’s relevant to these customers who want a surprise in their experience,” said co-founder and CEO Rafael Museri. “We tap the local artists and workshops and let them create an aesthetic. The community decides what kind of wellness programming we’re going to have, what kind of music. Selina is the platform that lets them do it efficiently. We can now convert a property in about two months.”
Intriguingly the company has grown mostly through word of mouth. So far Museri has been skeptical of traditional customer acquisition methods.
“Personally, I never consume a product because I’ve seen a billboard or someone pushed me through the internet,” said Museri. “I’m not a big believer in traditional branding efforts. It’s Selina’s offline content — and how well it helps guests socialize and work and feel fulfilled — that will drive occupancy and repeat business.”
Selina plans to open 35 properties by the end of this year.
Things haven’t entirely gone according to plan. Selina first intended its U.S. premiere to take place in September 2018 in Florida. It later pushed that back to February 2019. Now it says its first three properties in Florida will open sometime in 2019.
In the U.S., the company has signed nine deals, said Yoav Gery, Selina’s president. “We have a strong pipeline beyond that in the U.S. in particular.”
Tel Aviv and Greece are among its upcoming outposts.
Critics said the company has so far not been as fleet of foot when it comes to some operational aspects. Separately, it competes for deal flow with traditional professional services firms that specialize in real estate and investment management and have well-practiced playbooks.
Selina aims to “redefine the way millennials live, work, play, learn, and give back,” said Lincoln Benet of investor Access Industries.
It typically provides dedicated coworking spaces rather than merely encouraging people to work in its lobbies. It usually coordinates wellness or art-related activities for guests to participate in rather than install a gym.
On that score, Selina certainly takes the notion that “everything is converging in hospitality” — one of Skift’s Megatrends for 2019 — farther than most other industry players.