Hmlet gets $6m lifeline from Sequoia, Burda, and others; shuts down Australia ops

It hasn’t been a particularly easy past year for Hmlet. The Singapore-based property tech and co-living startup had recently announced layoff after layoff amid efforts to adjust its business.

Hmlet said that its headcount has been further reduced from 100 employees by the end of December 2020 to around 70 to 80 staff members currently. Meanwhile, co-founder Yoan Kamalski had stepped down as CEO.

The company, however, could get a new lease on life. Hmlet told Tech in Asia that it has raised US$6 million in a series B+ round co-led by Sequoia Capital and Burda Principal Investments. Existing investors including Aurum Investments, Reinventure Group, and Beeblebrox also participated. 

The Hmlet team / Photo credit: Hmlet

Hmlet declined to comment on its valuation following the fundraise.

“In March, we were the only investor who was willing to put money into Hmlet. The company is worth saving,” said Peter Kennedy, senior advisor at Burda Principal Investments. Kennedy, who also serves as the startup’s interim CEO, was responsible for convincing existing investors to join this financing round.

In addition, the company is closing down its operations in Australia, as it wasn’t on par with the performance of other markets such as Hong Kong, Singapore, and Japan.

Five staff members will be laid off and given four extra weeks’ worth of severance pay, in accordance with Australian labor law.

The capital injection and cost-cutting will give Hmlet a runway of 18 to 24 months before its funds are depleted. However, talks are ongoing to pump in more money into the startup by the third quarter of 2021, with existing investor Mitsubishi Estate potentially joining the round.

A shift in business strategy

Hmlet has significantly decreased staffing on the tech front, among other cost-cutting efforts, to slash its burn rate by about 60%. It also aims to drive up occupancy of its spaces by 3x to 3,000 rooms from 1,000 rooms to hit breakeven point.

The company has also shuttered Hmlet Listed, a rental platform for landlords, agents and tenants, after conducting a pilot program of the venture in Malaysia and Thailand. Meanwhile, it has generated “material revenue” from Hmlet Interiors, its interior design arm, which is still operating in Singapore.

One of Hmlet’s properties / Photo credit: Hmlet

With the newly raised funds, the startup will diversify into managing properties that have been acquired by existing hotels in Hong Kong, Singapore, and Japan. Hmlet will also invest in distressed hotels in the Asia-Pacific and turn them into co-living spaces.