Why you should care
Because this lucrative corner of the travel market finally has a 21st-century platform.
A couple of years ago, Dustin Figge called his mom to tell her that he’d decided to quit his job as a manager in San Francisco. He wanted to return to his native Cologne, move back in with his parents and start his own company. She told him he was crazy. “You get shitloads of money for the work you do, you live the life millions of people want to live and you’re telling me you want to quit your job and start a business with zero cash in the bank?” he recalls her saying.
That was in 2014; today, his mom works in their finance department. Homelike, the tech startup Figge founded together with Christoph Kasper six months after that phone call, now employs 100 people, has raised $18 million from investors and is active in more than 400 cities in Europe.
The Cologne-headquartered company has found success by focusing on an underserved, overlooked segment of the fiercely competitive, $160 billion global travel market — that of corporate long-term, temporary housing.
The business-travel-accommodation market has been stuck in the past, says Figge, 33. “When you book long-term apartments, the experience is as [it was in] the 1980s. So, it’s very, very offline,” he says — from calling to set up an appointment to viewing the apartment to signing the rental agreement and paying via wire transfer. It’s a far cry from what consumers are used to on sites like Booking.com, Airbnb and Trivago.
Homelike operates like a marketplace for business flats; it connects companies who need to temporarily relocate employees with landlords online. Landlords advertise their listings for free but pay a commission of 12 percent on each booking made through the platform.
With a few clicks, companies can book a furnished apartment, sign the digital rental agreement and pay online, while the website’s 360-degree virtual tour feature removes the need for on-site visits. Homelike is “about providing an experience people got used to from the short-stay industry,” Figge says.
Whether Homelike will be able to fend off Airbnb will depend on how fast it can rack up corporate partners.
At a time when a globalized economy means that more and more workers are temporarily being posted abroad and freelancers are embracing the digital nomad life, Homelike is responding to the needs of a new generation of business travelers who put a prime on flexibility, Figge says. They have customers who have relocated to a new city every single year and Figge himself — a 6-foot-2 lean figure who surfs and competes in triathlons in his free time — has lived in four countries. His long-term girlfriend, who also has her own business, currently lives in Barcelona.
Homelike spotted and craftily responded to an opportunity in the travel industry, says Pinar Ozcan, a professor of entrepreneurship and innovation at the Saïd Business School at Oxford University in the U.K. “It’s a great idea because it’s a market gap that has not been filled yet,” she says. But Ozcan says Airbnb will soon be on Homelike’s tail, as this “is a very natural area for them to grow in.” Whether Homelike will be able to fend off its $35 billion U.S. challenger will depend on how fast it can rack up corporate partners before Airbnb moves in.
Already on it, Figge says. The company has developed software features that meet the precise needs of companies — invoices that stipulate the sales tax paid, recurring payment options as well as easy integration into a company’s expense and accounting systems. “That puts us ahead of the market,” he says.
Fifteen thousand companies already use Homelike, and this includes major players like global consulting firm Capgemini and Adesso, one of the largest German IT service providers. Figge says the company will expand to the U.S. market in the next six months. Asia and South America are next.
Figge was born and raised in Cologne, the largest city in the North Rhine-Westphalia state. While studying business at the University of Cologne, he got his first taste of leadership managing about 40 people to put on the student-run World Business Dialogue. When he delivered the keynote speech on the conference’s first day, something clicked as Figge looked into the audience: “This was probably a point where I realized I have something which could … create something huge.”
This is classic Figge. He sounds like a typical Silicon Valley type, speaking of the company’s success and his own qualities casually but self-assuredly, as if describing the weather. Yet he is also aware of the mental health toll of the working culture he witnessed from the “crazy entrepreneurs” who crowd the city.
Thomas Schneider, a longtime close friend, says Figge hasn’t changed much over the years. “He has grown and has become more professional business-wise than he has been before, but on a personal level he’s still the same cool dude from the neighborhood,” Schneider says. While Figge is easygoing, generous, caring and trustworthy, Schneider says, his pal can also be a “tough cookie,” someone who can be single-minded about his goals, someone who refused to follow the teacher’s instructions when they didn’t make sense to him.
After the 2010 World Business Dialogue, Figge was contacted by a trustee of the student conference’s board — Rolf Buch, the CEO of Arvato AG, a global services company headquartered in Germany. Would he be interested in becoming his executive assistant?
After 18 months, Figge relocated to take up a managerial position in the company’s San Francisco office. Until he decided it was time to launch his own company. He chose Cologne because of San Francisco’s astronomical cost of living and, thus, expensive talent. “We would have needed to pitch to investors right away and there would have been a risk that the money would not have lasted for a long period of time,” he explains.
But they’re working their way back toward the U.S. “We don’t want to build an average company; we want to build a global, winning company,” he says. “It’s a motivation for us — that someday we will have an office in San Francisco. And then everything is coming back together.”