StartupZeus Living Winds Down Operations Amid Rising Mortgage Rates
Startup Zeus Living has become the latest casualty in the proptech world, reportedly "winding down operations" due to financial struggles. According to a report by The Information, the company is no longer able to make payments on its managed properties.
Zeus Living’s Background and Funding History
Founded in 2015, Zeus Living initially focused on redecorating landlords’ homes and renting them out as furnished properties for corporate housing. As the company grew, it expanded its offerings to include a broader range of options for individuals looking for flexible living arrangements.
In addition to its $150 million in funding, which included $125 million in equity investments, Zeus Living had backing from prominent companies such as Airbnb, Initialized Capital, and Opendoor’s Eric Wu. The startup also received support from Y Combinator and NFX.
Rising Mortgage Rates Impact Proptech Sector
The decision to wind down operations comes amidst rising mortgage rates, which have increased significantly over the past year. This shift in interest rates has made it more expensive for companies like Zeus Living to invest in real estate, ultimately affecting their bottom line.
As reported by The Information, Zeus Living’s CEO and co-founder, Kulveer Taggar, attributed the company’s struggles to the rising costs of purchasing homes, which have cut into revenue. The company had previously benefited from the remote work revolution sparked by the COVID-19 pandemic but was unable to sustain its growth in the face of increasing mortgage rates.
Airbnb’s Investment and Zeus Living’s Downfall
In 2019, Airbnb invested $55 million in Zeus Living as part of a Series B funding round. At the time, the company had reached a revenue run rate of $100 million and was valued at $205 million. The investment aimed to support Zeus Living’s expansion into new markets.
However, the company’s struggles have led to a significant decline in value. Another proptech startup, Anyplace, has continued to grow despite the challenges faced by its competitors. In March 2022, Anyplace raised $8.27 million in Series B funding, demonstrating that there are still opportunities for innovation and growth in the flexible living space.
High Mortgage Rates Continue to Impact Proptech Sector
The proptech sector has been hit hard by rising mortgage rates, with several companies struggling to adapt to the changing market conditions. Zeus Living’s decision to wind down operations highlights the challenges faced by startups in this industry and the need for innovative solutions to navigate these difficulties.
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