Another proptech startup ran into trouble.
Frontdesk, a startup that managed more than 1,000 furnished apartments across the United States, laid off its entire 200-person workforce on Tuesday after efforts to raise more capital failed, TechCrunch has learned exclusively from sources familiar with the company’s internal affairs. The massive layoff comes just seven months after the Milwaukee, Wisconsin-based startup acquired smaller rival Zencity.
The layoffs, which included full-time employment, part-time workers and contractors; occurred on Tuesday afternoon during “a two-minute Google Meet call,” according to an employee who was among those who participated in the virtual meeting.
During this call, Frontdesk CEO Jesse DePinto told employees that Frontdesk would apply a state acceptancean alternative to bankruptcy, according to the sources.
The company has not responded to a request for comment. When you call the number on the company’s website, a recording says: “Frontdesk is currently unavailable. If you have a reservation, please look for alternative accommodation and expect to hear from you within the next two weeks.” TechCrunch will update the article if the company responds.
Frontdesk, which was founded in 2017, had raised about $26 million from investors including JetBlue Ventures, Veritas Investments and Sand Hill Angels, according to Crunchbase.
Frontdesk went out for a bridge round, trying to sell investors on a new plan for end-to-end building management, sources told TechCrunch. This tactic did not work and the company could not continue to operate. Frontdesk was apparently still optimistic about its ability to raise more capital. the startup had posted several job openings on LinkedIn, including chief of staff rolejust two months ago.
The startup’s business model, which is to lease apartments at market rental rates and furnish them for short-term rentals in more than 30 markets, has been largely hampered by upfront costs, associated capital expenditures and variables in demand and the percentages. sources said. Others in the space also had challenges, including Stay Alfred, Domio, Lyrical, Zeus ZeusThe Guild and WanderJaunt.
