Short-term luxury rental company Wander announced today a Series A raise of $20 million and the opening of their booking platform to the general public. Founded just nine months ago, by Forbes’ 30 Under 30 alum John Andrew Entwistle, the startup has already surpassed 30,000 users on their waitlist and over 2,000 founding members who each pre-paid a $100 credit on their account during the company’s beta phase (thus allowing them to skip the waitlist). Many of the founding members participated as angel investors starting as early as the company’s seed round which, in conjunction with Redpoint Ventures, reached $7 million.
Wander caters to digital nomads in need of a reliable place to stay connected to work while also being able to vacation in off-the-beaten track, luxury homes. With their forthcoming crypto payment option, free use of a Tesla and 1GB Wi-Fi at all of their properties, Wander’s digital nomads skew less toward the hapless hippie vibe, and more toward Zoom-tethered individuals with a yearning for peak experiences.
“I think people who are fans of the future can see what we’re trying to orient ourselves towards,” said Entwistle. “We want to create the infrastructure to experience the world. With the pandemic you realize [digital nomads] are your banker, your lawyer. It’s really everyone.”
They currently have five properties in their portfolio, in Lake Tahoe, Joshua Tree, Mendocino County, Port Orford and Bandon Dunes with plans to add dozens more as quickly as is feasible.
QED Investors led the Series A, with participation from Redpoint Ventures, Authentic Ventures, Fifthwall, Susa Ventures, Kevin Durant, Packy McCormick, Sahil Bloom, Todd & Rahul’s Angel Fund, Alumni Ventures, Vibe Capital, a16z and others who were not named publicly. With such a substantial amount for a Series A plus the significant number of marquee-level participants it shows a strong desire within investor communities for a business model ready to withstand not just a widespread pandemic but also the trend towards Web3.0 (increasingly referred to as Web3). Typically described as decentralized, autonomous digital platforms and communities, Web3 is forcing many businesses, and their investors, to rethink how to be profitable in an age where people are less likely to congregate in the same place for work or leisure.
Wander purchases all of the homes on its platform, turning them into smart homes that guests can manage directly from the app on their phone (even the luxury fire pits can be controlled from the app). The decision to purchase the homes instead of having a network of homeowners list their own properties on a digital platform came directly from Entwistle’s experience vacationing at a property that was nothing like it had been advertised, including uncomfortable beds and non-working WiFi. He started wondering if a bespoke short-term rental company would be viable and soon thereafter began building the team and digital tools that became the foundation for Wander.
Entwistle refers to it as the ‘infrastructure of happiness’, which in the case of Wander includes partnering with local companies to clean and maintain each property (who are included on the ‘thank you’ wall within their website), a human-based concierge service and building a strong sense of community within the user base through social media and other platforms. The latter came into play most notably at the Tahoe property this past winter when one of their guests was snowed in after a record snowfall just before they were set to leave and a new family was due to arrive. “We contacted all of the local people who support Wander and they were like, ‘Yes, let’s get this guest un-snowbound,’ said Entwistle. “It was an incredible amount of snow and they cleared the driveway.”
Wander also paid for the arriving guests to stay in a hotel in Reno and once the roads were clear brought the Tesla to them. “It’s a very unscalable thing,” said Entwistle. “Putting them up in a hotel and otherwise was expensive. But it’s how we would want to do it. It’s a digitally managed process built on real human connection. There will be many stories like that I’m sure throughout the history of the company.”
Beyond the decentralized nature of the properties and customer base, the multiple financial safety nets built into a model such as this also hint at an early blueprint for how companies can operate profitably in Web3. While Wander’s current business model is dependent on nightly revenue from bookings (prices start at $350 per night), owning their inventory adds several layers of versatility which can expand to include different revenue streams. Properties could become longer term rentals if global travel comes to a halt. Wander could also profit significantly by selling the individual homes, which most likely will have appreciated in value as they were generating income on their platform.
“Whenever you buy a property on this platform, the value of the company accretes,” says Chuckie Reddy, partner at QED Investors, adding the financial structure could also adapt if needed. “There is an opportunity here to effectively create a captive REIT that will own the real estate and be separated from the platform itself.”
Entwistle imagines another iteration of their core concept built around a solid membership base by saying, “Rather than buying any second home, you buy your second home from Wander. It gives you access to this network of all these other homes you can go to at any time.”
The Wander model may have inadvertently tapped into the demand for a new subtype of asset class within real estate. Smart home amenities are nothing new, but turnkey properties with features that reach granular-level touch points of a guest’s visit are rarely found on the short-term rental market. Built with working professionals in mind, each Wander property comes with strong indoor/outdoor Wi-FI, several high-end workstations with large monitors, high quality webcam and microphone set-ups, ergonomic desks and chairs—all situated in front of impressive views. Kitchen necessities, branded luxury robes, saunas and fitness options such as Peloton bikes also come standard.
“If you bring your clothes and your laptop, you’re ready to go into a Wander,” said Reddy.
We don’t yet know the full roadmap of how businesses will operate in Web3. Yet, finding the balance between a decentralized structure, multiple types of revenue streams and a loyal and committed user base could be the foundation to how companies can pivot to a new way of doing business. The added element of creating a ‘virtual incubator’ of sorts where thought leaders can become part of a community in a remote manner suggests another element of what companies could look to in order to be successful. One thing is certain: we are all going to need stronger Wi-Fi.