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Selina secures new funding, evolves unique offer

Selina, an emerging brand that combines private and shared accommodation with coworking facilities for ‘digital nomads,’ announced on Wednesday that it has raised US$100 million in a Series C financing round, bringing the company’s total funding to US$225 million. Launched in 2015, Selina currently operates 46 locations in 13 countries, with over 22,000 beds open or under conversion.

The new round of funding will help Selina reach its stated goal of 130,000 beds and over 400 properties by 2023 for a design-forward, technology-centric concept that also includes food and beverage, wellness, retail and local experiences.

In 2019, Selina is set to open an additional 35 properties in the U.S., U.K., Germany, Portugal, Greece, Israel, Argentina, Brazil and Mexico, in tandem with expansion into new European and Latin American markets and an entrance in Asia by 2020. To fuel this aggressive growth, Selina has also secured substantial funding commitments from regional partners who will acquire real estate and fund Selina’s conversion costs at the country level. To date, Selina has secured over US$300 million in real estate commitments and is in advanced negotiations for an additional US$200 million in Europe, Latin America and the U.S.

Selina measures its sales by bed instead of by room since it offers products ranging from bunk bed and shared rooms to private accommodations. Selina President Yoav Gery told HOTELS on Wednesday that its initial and more stabilized properties across Latin America (Panama, Colombia, for example) are performing well and on track with business plans. Average bed rate stands between US$20-30 in those markets and with 30% to 60% of revenue coming from F&B, co-work and wellness, revenue per available bed is at US$45. As the brand moves deeper into Europe and the United States, Gery suggested bed rates could jump to between US$40 and US$100, and revenue per available bed should reach US$65-70.

The Selina model calls for entering 20-year leases with land owners, some of whom are already Selina partners. Otherwise, Gery estimates today Selina works with close to 40 individual owners who fund conversions. He added that master lease arrangements by region are in the plans moving forward.

Conversions usually take three to five months and costs today range from US$3,000-4,000 per bed, increasing to US$5,000 if there are more hard costs. Many of the conversions have been hotels and Gery said if the bones of the property are right (right number of rooms and public space square footage), and location attracts millennial travelers, they can convert anything from a hostel to a Ritz-Carlton. “It’s definitely a relatively inexpensive conversion cost in the hotel world,” he added.

Selina Medellin, Colombia
Selina Medellin, Colombia

Gery said the concept is probably on its sixth generation with quality of the finishes increasing as it grows outside Latin America. “Things like coworking, F&B and wellness are constants,” he said. “Now we are adding music studios, educational programming and more, and our ability to provide a bigger platform allows us to attract everything from independent travelers to tech companies and bicycle tours. And as the platform continues to grow, it will allow even more consumer segments to jump in. Content will grow as we enter new markets and the system gets bigger. Average length of stays will also increase as the idea of the digital nomad grows.”

Gery, who has worked for traditional lifestyle brands, said this work experience at Selina is unlike anything he has experienced. “Selina is changing the world of hospitality. It is in tune with where millennial traveler are at and where they want to go,” he said. “Traveling for experiences and meeting other people is where the world is heading, and we are creating a system for this that doesn’t exist. It’s about creating an environment that allows for meaningful connections.”

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