Rental platform Silkhaus plans new Saudi home

Silkhaus

• Silkhaus revenues up 120%
• Completed funding round 
• Due to launch in Saudi Arabia

Silkhaus, a property technology platform specialising in short-term rentals, plans to launch in Riyadh after more than doubling its revenues last year and completing a pre-series A financing round this month.

The size of the round, with San Francisco-based Partners for Growth, was not disclosed. 

Silkhaus launched in Dubai in 2021 and entered Abu Dhabi last November. It lists short-term rentals on its bookings website and provides asset owners with technology-based tools to manage their properties. 

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The company charges a fixed commission, which it does not disclose, on the monthly revenue generated for asset owners. 

Its revenue grew by 120 percent year on year as of the end of 2023 and it is aiming for similar growth for 2024 and beyond, its vice-president for finance and strategy, Ankit Shah, told AGBI. 

“We are laying the groundwork to launch in Riyadh in the first half of this year,” Shah said. He called it a “dynamic market experiencing rapid growth” but said it suffered a shortage of accommodation for visitors.

Shah cited the emergence of Saudi Arabia’s tourism mega-projects as a key driver of demand.  

Silkhaus says it lists around $150 million of real estate on its portal and claims to set itself apart from rivals such as Airbnb by managing every aspect of each property for owners, from bookings to maintenance, and providing a “digital concierge” and other customised services for guests. 

The company raised $7.75 million from global investors in 2022 in what was said to be one of the largest seed rounds in the Gulf. 

Since then, it has continued to grow and there has been strong demand for short-term lets among corporate travellers and holiday makers.  

Silkhaus

Several factors are contributing to this “burgeoning demand”, Shah said: 

“The UAE’s stable economy and attractive lifestyle has attracted new residents seeking flexible accommodation and this is expected to continue.” 

The introduction of visas for freelancers and “digital nomads” who work in different parts of the world year round has also fuelled demand, he said. 

The escalating price of hotels – especially for families – “has prompted a search for economical alternatives that also offer larger living spaces”. 

Average daily rates for short-term rentals in Dubai were up 10 percent year on year to AED893 ($243) in November, the most recent portfolio data from the host management service AirDXB Group showed. 

As of early December, rates for AirDXB properties were up by 20-25 percent compared with 2022, an increase that has been attributed to the Cop28 summit. 

Across the wider market, December average daily rates stood at AED1,100 and the occupancy rate at 51.2 percent, slightly down from 60.4 percent in November and 56.1 percent in October, AirDXB Group said. 

Vinayak Mahtani, chief executive of Bnbme Holiday Homes, told AGBI that short-term rental rates would drop this year as supply outstrips demand. 

He pointed to competition from new hotel rooms in the emirate, up an estimated 6.4 percent annually to 154,000 in 2023, according to Knight Frank. 

However, Shah said Silkhaus was finding the opposite problem: “Demand consistently outpaces our current capacity, prompting us to rapidly onboard new property owners to meet the sustained increase.” 

Shah said that the company’s outlook was positive, but the market still “presents challenges”.

“Navigating Dubai’s highly competitive landscape is no easy feat. Maintaining the quality and experience of our offerings is paramount,” Shah said. “The market’s pronounced seasonality, with significant shifts especially between summer and year-end, adds another layer of complexity.”