While working in the software industry in Charlotte, Emir Dukic and his wife purchased a house in the city center with an in-law suite above its detached garage. Following in the footsteps of many homeowners around the world, they listed that spare room on Airbnb to earn extra income.
The hope for a little side money turned into a real hustle as the garage unit ended up generating enough revenue to pay their mortgage each month. According to some calculations, the spare bedroom market is quickly growing to more than $170 billion, just in the U.S.
In 2016, the company that Dukic was working at was acquired, and he was looking for his next move.
“Then I realized I already had a business in my backyard. My initial thoughts were, can I replicate this? And is it scalable?” he asks.
To test his idea, Dukic visited property owners near his area and offered to paid them a premium on their monthly rent if they allowed him to turn their extra home units into short-term rentals. He successfully onboarded a few in late 2016 and brought on CTO and co-founder James Strong to build a platform to automate and manage the properties.
The startup, Rabbu, quickly grew to 25 properties in 2017. They offered a curated hotel-level experience for guests and a turn-key experience for property owners, taking on guest communication, cleaning, listing, and repairs and maintenance as necessary.
Rabbu currently offers two plans: a fixed plan where property owners sign a 12-month lease contract with monthly payments, and a flex plan charged on a per-booking basis.
Due to their rapid growth, the team considered merging with another startup, but now-CEO Dukic ended up walking away from the deal. “It made more sense for us growth-wise to invest the time into creating a client-facing version of the technology,” he explains.
That failed deal was the impetus for Rabbu’s client-facing software, which helps the startup differentiate itself within the short-term rental space. Rabbu’s newly-released SaaS platform uses artificial intelligence to help property managers optimize their energy consumption, automated check-ins, internet access status, and other smart home data.
This offers another solution for property managers that want to continue overseeing their property, but need a way to streamline operations — from automatically sending the lock code to new guests to monitoring how many devices are connected to Wi-Fi. It also connects with Airbnb, VRBO, and Homeaway to access the calendar and messaging functions.
They’ve signed partnerships with seven of the largest smart home platforms, including Ecobee, Curb, Plume, and others. Dukic believes that this offering will be the key to scaling nationally. “Our technology now allows us to provide others with the tools to give the same level of service,” he says. “We are providing a full home automation and guest service solution in a highly fragmented market.”
Rabbu now has over 65 properties listed on the platform, with the goal of hosting 250 more in the next two years. About 80 percent of the bookings are elicited from an ongoing partnership with Airbnb.
The team raised $1.5 million last month, led by Agilis Equity Partners, to expand to their service to three additional markets and launch the new software offering. They’ve grown from three to 12 employees in the last six months with plans for more additions.
“We made sure we structured both teams (software and turn-key management) in a way that they don’t have mixed goals or objectives,” says CRO Evan Aloe.
“We’re widely recognized and already have a name in turn-key property management,” he continues. “Whereas in software, we’re moving forward to establish our name and gain foothold in the space. This year will be our strong tech year.”