Global hospitality brand Selina is expanding to the US, starting with L.A. The innovative model combines creative accommodation with entertainment concepts and co-working areas that appeal to digital nomads, as Selina calls them. In L.A., it has plans to roll out multiple locations in West Hollywood, Venice and Silverlake. In addition to rolling out in L.A., Selina has raised $95 million to fund its expansion from Abraaj Group and WeWork founder Adam Neumann. We sat down with the company's head of business development Steven Ohayon to talk about the expansion in L.A. and its recent fundraising efforts.
GlobeSt.com: Tell me about the Selina concept and the original impetus to launch the company.
Steven Ohayon: The company started four years ago based on the thesis that there was a need in the hospitality segment to combine different ranges of accommodation options. We didn't believe that social classes should dictate whether you could stay in a one- or three- or four-star hotel. We wanted to start a concept where every door in a hotel looked the exact same, but some were 20-bunkbed rooms and others were in an amazing suite. In the food and beverage area, everyone is dressed the same, in jeans and a t-shirt, meeting each other. That was the initial vision—to put together a concept that blended those two worlds. Once we built the first few concepts and it was really working, we knew there were more components that we needed to provide if we are really going to make this product for a generation of people that think and live a certain way. They need more than just accommodation and food. They need co-working spaces and wellness and experiences and culture. So, we started adding all of it into our concept. It became a holistic approach to travel and lifestyle. Today, the concept has evolved into something that provides all of those things. The experiences are also not only for travelers but also for the local community as well.
GlobeSt.com: Why did you choose L.A. for your US expansion?
Ohayon: L.A. really speaks to our brand—the vibe, the lifestyle, the way people move around. It is also a great base for larger California. We look at our expansion in a way that we are providing a holistic experience in the community, and we can't do that by just adding a flag. We need to find places that can be entire ecosystems for our community. In L.A., we see four or five locations and locations outside of L.A. that our customers can travel to and still be in a Selina product. L.A. also has so much diversity, and we can create one concept in West Hollywood and another in Downtown L.A. When we look at the entire US, we are looking at it in the same way. We are looking at major cities as well as the markets surrounding those cities.
GlobeSt.com: Are you planning an aggressive expansion for other US markets as well?
Ohayon: It won't be as aggressive as California, but yes. We are expecting to sign up 7,500 to 10,000 beds this year across the US. Of those, 2,000 to 3,000 will launch this year. Once we sign up some of those flags, those will be the ones that grow within their jurisdiction. The ones that are L.A. will be the locations with the most flexibility because there is so much that we can grow into. L.A. is just the starting point for us, but our business plan is really for the entire country. We are also expanding into Canada as well.
GlobeSt.com: You also just raised $95 million for your expansion. Tell me about your fundraising efforts and how it aligned with your expectations.
Ohayon: It was an amazing experience. There was a lot of demand in the round. We went and found two of the most attractive investors, and our goal was around $90 million to $95 million. That capital allows us to achieve our goals by 2019. We plan to use that capital to invest in much higher return investments, like building our technology infrastructure and sales and marketing efforts to get global brand exposure. We have executed local partnerships that will fund the development of our new sites so that we don't have to use the $95 million that we raised to invest in tables and chairs. We can get those investments locally from different pockets of capital. That is what allows that $95 million to increase the runway through 2019, where we expect to have 35,000 to 45,000 beds in our system.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Kelsi Maree Borland
