Toronto-based proptech startup Enso Connect has raised just under $2 million CAD in seed financing to expand the reach of its platform, which aims to help short-term rental operators using platforms like Airbnb improve their guest experience using artificial intelligence (AI), Internet-of-Things (IoT) connectivity, and data analytics.
Since its launch earlier this year, Enso Connect, which began as a class project following a particularly unfortunate Airbnb experience, has seen significant growth.
“What we realized was, instead of competing with the 300-plus property management softwares … we needed to find a way to work with [them].”
-Francois Gouelo, Enso Connect
In an interview with BetaKit, Enso Connect’s co-founder and CEO Francois Gouelo said the startup plans to use the fresh funding to add more integrations and support the rollout of a new customer relationship management (CRM) component.
“What we realized was in order to service more clients … we needed to build out new integrations and get to market even faster, specifically with COVID not slowing down, but with travel ramping up,” said Gouelo. “We wanted to make sure that we can service those different integrations, bring on new partners, and scale more quickly, globally.”
The startup’s all-equity seed round was led by Toronto’s Mantella Venture Partners, and saw participation from strategic investor Michael Hyatt, Ottawa’s Mistral Venture Partners, Andrew Kitchell, founder and CEO of fellow proptech startup Wheelhouse, and Toronto-based real estate investment firm Cowie Capital Partners (the latter having previously invested alongside Hyatt in Bolt).
The financing represents the majority of Enso Connect’s total funding to date.
Founded in 2019 by Gouelo and chief technology officer Peter Sorbo, Enso Connect aims to help hospitality businesses better understand their guests and personalize their offerings.
Gouelo said the initial idea for the startup came to him a couple of years ago after an especially bad short-term rental experience during a ski trip with a friend while he was studying at University of Toronto (U of T). This Airbnb stay began with a unit key frozen under a patch of ice, and involved a flurry of communications regarding how to navigate the property’s heating system (particularly important given the minus-20 degrees celsius temperature).
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After Gouelo and his friend accidentally left a window open, the host threatened to take the pair to small claims court. Fortunately, he never followed through, but the experience led Gouelo to realize a smart home solution “would have solved a lot of problems,” and decided to build one as part of a U of T entrepreneurship challenge that they eventually won, taking home $10,000.
Enso Connect began by building property management software focused on IoT-connectivity that competed with other similar offerings. The startup was looking to raise pre-seed funding when COVID-19 hit. However, as the pandemic hit the travel and hospitality industry hard, Enso Connect lost most of its investors and customers.
As a result, the startup pivoted its business.
“What we realized was, instead of competing with the 300-plus property management softwares … we needed to find a way to work with [them] and focus on what we were good at,” said Gouelo. “And what we’re good at is communication, and the guest experience.”
Enso Connect, which integrates with platforms like Airbnb, aims to capitalize on what it sees as the short-term rental market’s shift towards professionalization. According to Gouelo, there are groups of property managers looking to make the space more professional. “They’re acting like hotels, they’re running their businesses essentially like hotels, but with a disparate inventory,” he said.
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To keep up with guest demand for “hotel-like experiences,” operators have begun to leverage and combine various softwares and spend more time and money personalizing their offerings, which Enso Connect claims has resulted in “fragmentation.” The startup aims to solve this problem by providing “a single operating system for the guest experience.”
“The short-term rental market is all about serving guests, yet most of the tech in the market is only optimized for the efficiency of the property manager,” Duncan Hill, general partner at lead investor Mantella Venture Partners, told BetaKit. “Enso Connect is putting the focus of property manager automation where it needs to be for the market to flourish, on the guest experience.”
Gouelo claims Enso Connect’s platform, which offers a unified inbox that consolidates text, Airbnb, Booking.com, Expedia, and Whatsapp messages, can currently automate about 60 percent of guest-host communications, boosting the guest experience and helping hosts save time. It also uses AI to personalize guest experiences and trigger different recommendations, such as electric scooter rental suggestions or property reviews only if it senses the guest has had a positive visit.
But according to the CEO, the real opportunity lies in taking all this data and using it to increase your occupancy rates. Enso Connect aims to accomplish this through its new CRM tool, which gives operators information about their guest’s habits and preferences, allowing them to craft more tailored offers.
The startup, which launched its platform in a closed beta in March 2021, saw significant growth during COVID-19 despite initial market challenges. Today, it has over 12,000 listings across 18 countries, and has processed over 75,000 guests.
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“We demonstrated a new value in the short-term rental industry that can help bounce people off of the pandemic in terms of reducing their operational costs, starting to automate a lot of their tasks, and professionalizing their business,” said Gouelo.
The CEO attributed this growth to “a really big shift from the guy putting his place on Airbnb wanting to make some cash on the weekend versus the company that puts their place on different channels and is trying to create their own brand.”
Hill said Mantella Venture Partners identified a lot of potential in catering to these types of operators. “We see a big opportunity in the professionalization of the short-term rental market and didn’t see anyone else really focused on guest experience, which got our attention,” said Hill.
Hill added that the firm was particularly impressed by Gouelo and Sorbo’s ability to “navigate and adapt to a rapidly changing market, deliver fast on limited resources, and build an ecosystem of smart people and companies to realize their vision.”
Now, Enso Connect plans to expand its reach by growing its team in functions like engineering, marketing, and sales to help build new integrations with different IoT and service partners and property management softwares.
Feature image courtesy of Enso Connect