StayFi

StayFi

Early Stage

Building the STR (short-term rental) guest engagement & marketing stack

Building the STR (short-term rental) guest engagement & marketing stack

Overview

Raised to Date: Raised: $179,154

Total Commitments ($USD)

Platform

Republic

Start Date

06/12/2022

Close Date

10/16/2022

Min. Goal
$25,000
Max. Goal
$400,000
Min. Investment

$150

Security Type

SAFE

Series

Seed

SEC Filing Type

RegCF    Open SEC Filing

Valuation Cap

$8,000,000

Discount

0%

Rolling Commitments ($USD)

Status
Funded
Reporting Date

10/30/2022

Days Remaining
Funded
% of Min. Goal
Funded
% of Max. Goal
Funded
Likelihood of Max
Funded
Avg. Daily Raise

$1,433

# of Investors

244

Momentum
Funded
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Year Founded

2018

Industry

Business Services, Software, & Applications

Tech Sector

EnterpriseTech

Distribution Model

B2B

Margin

Low

Capital Intensity

Low

Location

New York, New York

Business Type

Growth

StayFi, with a valuation of $8 million, is raising funds on Republic. The company has developed a platform for professional vacation rental hosts to get direct bookings. It is building the short-term rental guest engagement and marketing stack and leading the book-direct revolution for vacation rentals. StayFi generates revenue by one-time hardware sales and recurring revenue subscriptions and is growing 13% month-over-month with $450,000 annual revenue in 2021. Arthur Colker founded StayFi in May 2018. The current crowdfunding campaign has a minimum target of $25,000 and a maximum target of $400,000. The campaign proceeds will be used for hiring, PMS integrations, the addition of new features, and marketing.

Summary Profit and Loss Statement

Most Recent Year Prior Year

Revenue

$436,476

$80,021

COGS

$358,464

$79,087

Tax

$0

$0

 

 

Net Income

$-35,060

$-53,983

Summary Balance Sheet

Most Recent Year Prior Year

Cash

$55,505

$4,679

Accounts Receivable

$7,474

$5,438

Total Assets

$106,910

$34,481

Short-Term Debt

$175,976

$102,987

Long-Term Debt

$99,500

$65,000

Total Liabilities

$275,476

$167,987

Financials as of: 06/12/2022
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Synopsis

You might think of Airbnb hosts as individual property owners looking to rent out an apartment, room, or house to make some extra money. But many of these hosts are actually small businesses and management companies. Oftentimes, remote bed and breakfasts, hostels, or hotels use sites like Airbnb or VRBO to reach a wider audience. But using a third party site like this has downsides. When a management company goes through Airbnb or a similar aggregator, it is subject to the platform’s fees, cancellations, and other policies. It also limits access to guest information and data.

StayFi is working with short-term rental properties to connect them with guests and increase their direct bookings. The company provides property owners with hardware and software to set up Wi-Fi in their rentals. The branded Wi-Fi portal can then be used to capture guest data and enable direct marketing. StayFi sells subscriptions averaging $125 to $205 per device and $3 to $6 per month for software. The technology is all plug-and-play, meaning managers can create custom captive splash pages (the screen that welcomes visitors to a website or program) to collect whatever guest data they see fit in order to grant Wi-Fi access. 

StayFi’s current Republic raise has been rated a Neutral Deal by the KingsCrowd investment team. 

Next Section: Price

Price

StayFi is raising capital on Republic via a Crowd SAFE at an $8 million valuation cap. In 2021, the company brought in $436,476 in revenue – resulting in a revenue-to-valuation multiple of 18x. The captive Wi-Fi market is relatively niche, so it’s hard to draw comparisons based on revenue alone. But for an early stage, revenue-generating startup, $8 million is very reasonable for investors and in line with most tech companies raising funds online.

Next Section: Market

Market

StayFi primarily operates domestically but has plans for geographic expansion. It already reports about 10% of active users outside the United States. The global Wi-Fi analytics market — which includes captive Wi-Fi portals like StayFi — stands at around $10.6 billion in 2022. The market is also growing at an impressive 26% annually. This market projection captures solutions for hotels, airports, restaurants, and retail stores in addition to StayFi’s target of short-term rental properties, making the total addressable market for StayFi somewhat smaller. 

That said, StayFi offers both hardware and software solutions, expanding potential market capture. The company could also be tangentially considered a marketing company. In fact, StayFi reports wanting to lead with marketing products in the near future and plans to shift to a software-only product later down the road (with Wi-Fi as an add-on). General marketing is a much larger market that may allow for more revenue, but it also opens the door to more direct competition. 

Investors should pay attention to the growth rate of StayFi’s current target market. At 26%, this is one of the faster growing markets we’ve seen in the startup investing ecosystem. It is rare to see a market with a growth rate above 10%, much less 20%. The growth rate of the Wi-Fi analytics market is a massive bullish indicator for StayFi. Adoption of captive Wi-Fi portals and other consumer data analytics solutions is only going to increase. If StayFi can stay ahead of the curve, it could be a big name in what is expected to be a large market five to 10 years down the road.

Next Section: Team

Team

Arthur Colker is the lone founder of StayFi. Colker has a bachelor’s degree from Georgetown University and a Master of Business Administration (MBA) from Columbia University. Colker first entered the world of hospitality in 2014 when he joined Hotelied, a booking platform for hotels that appears to no longer exist. He also has around eight years of marketing experience at various firms. In 2019, Colker founded VRM Insider, a vacation rental publication connected to the StayFi platform. He still works as editor in chief at VRM Insider.

Currently, the StayFi team includes a CTO, head of business development, head of sales, and off-shore engineers. CTO Adam Langsner served as lead engineer at Betterment before founding and leaving some ventures of his own, including a software company called EvenWallet. Colker reports that StayFi’s next hires will be in fulfillment and customer service roles.

This is a small and lean team, but management has impressive experience. Colker has direct expertise in hospitality and an MBA that could equip him with the skills and network needed to lead a company. Langsner has obvious technical expertise despite lacking experience in the industry. Overall, this is a strong team to bet on.

Next Section: Differentiators

Differentiators

StayFi has a number of indirect competitors, but none completely overlap with its offering. This is a double-edged sword. On the one hand, the company stands out for being unique. But incumbents in adjacent markets could easily copy StayFi’s Wi-Fi offering alongside their existing features. Take Optero for example. The company created a guest experience mobile app that serves as a hub for rental properties. On the app, guests can set temperature, check in and out, view guides, message hosts, and opt into marketing. Though Optero doesn’t specialize in captive landing pages for Wi-Fi, it can capture guest data for marketing purposes while providing other features. Optero and StayFi both offer occupancy monitoring by Wi-Fi-connected device counts. Optero’s service runs $8 per door each month.

Other indirect competitors include Touch Stay, a digital welcome book for guests in rental properties. Touch Stay has the same end goal as StayFi — increasing direct bookings — which it claims to do by improving guest experiences. 

Aside from these competitors, a number of other companies create captive Wi-Fi sites for a range of applications. Skyfii is one alternative that targets businesses, but it could easily apply its services to rental properties.

At $125 to $205 for hardware and a $3 to $6 in monthly software fees, StayFi is reasonably priced. There is also a convenience factor to the company’s plug-and-play model. Hosts can go through one platform for data, marketing, and Wi-Fi needs. The model also ensures recurring revenue that is complemented by bigger hardware sales. 

In sum, StayFi is differentiated from a product perspective but is hardly defensible. There are alternatives out there, and some have even more capabilities and integrations. That said, this is certainly not a winner-take-all market. There is room for multiple players, and the prospect of acquiring user data while maintaining internal policies via direct bookings is a strong pull for short-term rental properties. Perhaps the simplicity of a captive Wi-Fi portal will win out or make for a strong acquisition play by one of these other guest experience platforms.

Next Section: Performance

Performance

To date, StayFi has received about $292,000 in SAFEs and private investments. But the startup has been primarily bootstrapped and self-financed, according to founder Arthur Colker. The lack of external funding has resulted in Colker owning 94.6% of the company. Generally, bootstrapping a company can limit growth potential and, in this case, forces a lot of investor trust in a sole founder. That said, betting on a company this early on in its funding process could lead to massive returns if it finds later success.

StayFi anticipates it can operate for nine months without additional funds and expects reaching profitability in February 2023. The company maintained a very reasonable burn rate of just under $3,000 per month for 2021, with the expectation of burning around $200,000 for all of 2022. 

Currently, StayFi’s hardware margins (or profits) sit at 15%, while software margins are a strong 85%. These numbers likely contribute to management’s future plans for shifting to a software-only model with a Wi-Fi add-on. StayFi’s hardware and software offerings brought in $436,476 for 2021, up from $80,021 in 2020. This revenue came from 625 active customers that each service anywhere between one to several hundred homes. In total, StayFi reports that its software is in about 7,500 properties. Revenue for June 2022 came out to $95,000, contributing to an expected $1.3 million in revenue for the year. In 2023, the company is aiming for $2.5 million to $3 million in annual recurring revenue, excluding hardware sales. Given its current trajectory, these projections are very reasonable. StayFi’s financials are strong for an early stage startup. This is a lean company that could provide strong returns in the long run, with high margins and strong annual recurring revenue numbers.

Next Section: Risks

Risks

An investment in StayFi comes with a high risk profile First, a solo founder with no past experience in raising capital creates risk, especially when that founder owns the vast majority of the company, as is the case with StayFi. Having multiple founders increases networks, expands knowledge bases, and offers a sounding board on any major decision. Solo founders have to put in extra work to ensure their company’s success, and there is never any guarantee that they are up to this challenge.

Second, this round is being raised on a Crowd SAFE, one of the security types with the least in investor protections. Finally, there is some financial risk associated with this raise. None of StayFi’s financials are particularly alarming, rather typical for an early stage startup that will naturally carry a lot of risk. But the company is not yet profitable and is slightly overvalued given current traction. It will likely take some time for the company to be cash flow positive, though this is typical for a startup at StayFi’s stage.

Next Section: Bearish Outlook

Bearish Outlook

StayFi is in its infancy, bringing many uncertainties for investors. The team is very small and has just begun to bring in meaningful revenue numbers. But the company likely won’t reach profitability for a few years. That said, the biggest hurdles StayFi will likely face are user adoption, competition, and defensibility. Selling to businesses — rather than individuals — typically results in a longer sales cycle. This factor will naturally increase the timeline for StayFi to fully establish itself. There are also a number of competitors that StayFi will need to monitor and surpass. Guest experience platforms that collect data but don’t operate through captive Wi-Fi portals could easily replicate StayFi’s service, as little about it is defensible. Should StayFi beat out competition and push sales, it may be a long time before investors see meaningful returns.

Next Section: Bullish Outlook

Bullish Outlook

StayFi belongs to the Wi-Fi analytics market, which is growing at an impressive rate of 26% annually. It is a great time to enter this market as a founder and investor. StayFi’s leadership team has strong entrepreneurial and industry experience, despite being quite lean. Founder Arthur Colker has spent time in the short-term rental space and holds a Master of Business Administration, which could be beneficial when it comes to investor and talent networking. 

Margins are strong, at 85% for the software. Despite being pre-profit, the company has seen impressive revenue growth year-over-year, and StayFi projects closing 2022 with $1.3 million in revenue. The company is in a relatively favorable financial position for an early stage startup, as it can keep going without funding for around nine months. 

There is a clear product roadmap that makes sense for the company. StayFi plans to pivot into focusing on marketing components and offering a software-only product with Wi-Fi as an add-on. Plans to outfit existing Wi-Fi hardware make the company quite scalable. Finally, the short-term rental industry has been taken over by large aggregators like Airbnb, making it difficult for independent management companies to acquire guest data and market. StayFi’s service solves a true pain point for these companies.

Next Section: Executive Summary

Executive Summary

StayFi is a property management marketing suite that integrates with Ubiquiti Wi-Fi hardware and operates guest Wi-Fi access points. Short-term rental managers can create customized, branded, captive Wi-Fi portals to collect user data that may be unavailable if a guest were to book through Airbnb or another aggregator. StayFi indirectly competes with a number of guest experience software companies as well as general captive Wi-Fi services providers. Very little about its current service is defensible. StayFi is also in the very early stages of revenue generation and product development. It will likely be a few years before the company is profitable. The team is lean, consisting of a sole founder, CTO, head of business development, and a few offshore engineers. With time and money, management plans to hire out in the near future for fulfillment and customer service roles.

That said, the Wi-Fi analytics market is growing at a rate of 26% annually, a very bullish indicator for StayFi. Founder and CEO Arthur Colker has direct experience in the hospitality space and holds a Master of Business Administration, both of which will be useful for investor and talent networking. He has established a very clear product roadmap that focuses on the StayFi software suite, which already has strong margins of 85%. Colker projects $1.3 million in revenue for 2022 and $2.5 to $3 million in annual recurring revenue in the following year for software alone. Both projections seem to be reasonable given current traction and growth. 

This is a risky bet to place on a very early stage startup, but it could pay off in the rapidly growing Wi-Fi analytics market. Thus, StayFi is a Neutral Deal.

For questions regarding the KingsCrowd analyst report or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Olivia Strobl, July 20, 2022. 

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StayFi on Republic 2022
Platform: Republic
Security Type: SAFE
Valuation: $8,000,000

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