Case Study
Citi Ventures Provides Portfolio Company Kasa with PropTech Sector Expertise, Strategic Advice, Partnership Support and More

Kasa Living, Inc. (Kasa) is the leading tech-powered, flexible accommodations brand and operator that partners with real estate owners to meaningfully increase the profitability of investor-owned multifamily apartments, boutique hotels and single-family homes while delivering an experience that guests love and seek out.

Launched in 2016 by founder and CEO Roman Pedan, the San Francisco-based property technology (proptech) startup now operates close to 100 properties in over 30 cities across the U.S. — consistently improving property profitability by over 50% and upleveling property review scores meaningfully across online reputation channels.

Citi Ventures recently co-led Kasa’s Series C funding round in a joint venture with Citi Spread Products Investment Technologies (SPRINT).

Since welcoming Kasa into our PropTech portfolio, we have worked side-by-side with Roman and his team to help the company progress toward its goals amid the most challenging proptech market of the last decade.

Led by our Head of PropTech Investing Jeff Flynn, Citi Ventures has leveraged our deep proptech expertise and unique position in the ecosystem to help Kasa connect with new potential sources of capital, build out its team, evolve its go-to-market strategy and plan for the future. “Jeff has seamlessly intertwined his position at Citi and his expertise in proptech to help us make progress this year,” Pedan said in a recent conversation.

Helping Kasa Raise Capital and Grow

Per Pedan, the proptech capital-raising environment is “nuanced and distinct” from traditional venture capital, as it often occurs on two fronts simultaneously: raising equity or debt financing for the company itself and providing capital the company can use to acquire properties.

Thus, venture investors who understand that complexity and have relationships with financiers on both sides of the equation — investors like Citi Ventures — can “have outsized impact on capital-raising,” Pedan continues. Flynn has introduced Kasa to a range of potential funders, from real estate-focused family offices to institutional proptech investors. “His ability to connect us with potential ‘OpCo’ and ‘PropCo’ investors has helped plant seeds for what can be valuable long-term capital relationships for Kasa,” Pedan continues. “These are counterparties that someone who isn’t a sector specialist wouldn’t have a relationship with or be aware of. …Each of these relationships can have a large impact — the goal is quality, not quantity, and changing the business in a meaningful way,” he says.

Shepherding and Evangelizing Kasa Throughout Citi’s Global Enterprise

Of course, one of the most impactful relationships any startup — especially a proptech startup — can have is with a major bank like Citi, which is a significant player in the global real estate market across several business lines.

While potentially powerful partners, however, complex global enterprises like Citi can be difficult to navigate; without a guide, startups and small businesses may struggle to connect to the right people and teams. “Step one in being part of the Citi ecosystem is making sure it knows about Kasa and I know about it,” says Pedan.

Fortunately for Roman, he has a guide: Citi Ventures. “Jeff and team have helped us productively navigate Citi,” Pedan notes. “We’ve been able to seamlessly liaise with teams across the bank, including Citi Commercial Real Estate and Citi SPRINT.” Both Citi Ventures and SPRINT have introduced Pedan to key Citi colleagues, and Citi Ventures has included him in its annual FinTech Summit, Citi-wide virtual panel on the Future of Travel and more — leading to fruitful conversations and opening up numerous opportunities for partnership. “We believe future collaboration across these fronts has the potential to benefit both Kasa and Citi materially,” notes Pedan.

Being part of the Citi family has also helped Kasa connect to more property owners and investors looking to buy properties — which is key for the firm, as “we’re more constrained on properties than demand; we fill every space we have,” says Pedan. In pursuing a property purchase with a large investor, for example, Pedan was able to capture critical value from his relationship with Citi. “It was key,” he reflects.

Helping Kasa Build a Top-Tier Team and Chart a Path into the Future

While proptechs face unique challenges given their position within several overlapping markets, in many other ways they are like most startups: they are constantly redefining themselves in an effort to find long-term product-market fit, and they rely on having the right team in place to accomplish their evolving goals. That includes not only the founding team — which in Kasa’s case boasts alumni of Airbnb and real estate investors Apollo Global Management, KKR and Walton Street Capital — but also sales, marketing and more.

Here, too, Flynn has lent a hand, leveraging his network to source prospective candidates for key roles at Kasa. In one recent case, Kasa was looking to pivot its go-to-market strategy to align with the changing real estate landscape and needed the right person for the job. Roman reached out to his investors for help, and Flynn “connected the dots” to a contractor who came in and upgraded Kasa’s marketing collateral, advertising spend, customer relationship management (CRM) platform and more in the span of a few months. “[That person] was extremely valuable, saved us time and got us up to speed on various initiatives,” Pedan says.

Since then, Flynn has introduced Pedan to several other high-quality candidates for additional roles at Kasa. “These shots on goal with great candidates are putting us in a position to win,” Pedan continues.

As a board observer for Kasa, Flynn has also provided “thoughtful advice on strategy, tactics and crucial personnel decisions [that have] shaped our strategic path and decision-making,” says Pedan. From getting Kasa in front of key stakeholders at major proptech conferences to helping the company set a budget that will enable it to build a profitable business over the long term, Flynn has been supporting and furthering Pedan’s vision since Citi Ventures joined Kasa’s capitalization table.

“We’ve felt genuinely supported by Jeff’s work and appreciate the tangible value his collaboration has brought to Kasa,” concludes Pedan. “His work is a testament to the positive and meaningful impact that Citi Ventures imparts on its investment partners. We're looking forward to building on the partnership in the years ahead.”