Thread by @JoeySweeny

WFH from Tulum. Mexico City. Rio de Janeiro

Casai is the coolest LATAM startup you’ve never heard of.

Backed by $48M from a16z’s @astrange they’re using a mix of arbitrage, hardware, and customer obsession to replace AirBnB in emerging markets.

Here’s how it works 👇

.@hellocasai is like a vertical AirBnB

Launched in Mexico City after founder @nicobarawid stayed in one too many airbnbs without WiFi, Casai designs + manages each short term rental they list

WiFi, security, housekeeping, booking - it’s all in house

casai.com/en?currency=USD

But what fascinates me is the Win-Win-Win business model

For customers, for building owners, and for Casai

The Problem:

There are beautiful AirBnBs in Mexico City priced at $9-$18 a night.

But knowing nothing about neighborhoods in Mexico City I'd hesitate to stay at one

That’s where Casai comes in.

Casai guarantees a beautiful appartment with high speed WiFi, smart home speakers, and security.

Which allows them to acquire customers from the US - like me - who are happy to pay $100 a night to stay like a local in Tulum or Rio

That price differential unlocks an incredible arbitrage.

Customers are effectively paying US prices, $100+ per night, but Casai's costs? Local rates.

Effectively dollar denominated revenue, and then local currency operating costs. The margins are wild

And instead of signing leases on hundreds of apartments

and potentially falling into the WeWork trap of owing landlords when demand falls

On the supply side, Casai shares booking fees with building owners in exchange for space.

With Casai’s prices it’s a premium over tenants

And that’s before you get to the Moat. The tech.

In a hotel you might manage 700 rooms. But they’re centralized.

When those 700 rooms are apartments across many neighborhoods in a half dozen cities and 2 countries - it’s a lot harder

So it doesn't get easier with scale…

To solve that Casai is building custom tech to manage decentralized hospitality. Which even AirBnB doesn’t b/c it’s ‘just the platform’

Custom ERP systems, price discovery tools for local neighborhoods, and even custom smart locks for the front doors of every apartment

As they scale from Mexico to Brazil to other emerging markets the operational challenges make it hard to copy.

For instance language. Nico speaks English and Spanish but not Portuguese. So hiring staff and managing real estate in Brazil requires a different ops team than Mexico

As for AirBnB, they're more partner than competitor. Casai lists their apartments on AirBnB whenever they need to fill rooms.

AirBnB takes a fee of course but as Casai scales it lets them tap demand

Now 50%+ of bookings come straight through the Casai platform.

If it works they’ll earn the Global Network effect AirBnB is often lauded for.

Once you've stayed in one Casai it'll be the first place you search when you go somewhere like Buenos Aires, or Hanoi, or Bangkok

They’ll have a global demand base local competitors can’t reach

And as working from home goes mainstream and business travel shifts away from hotels Casai will ride the tailwinds

Vacationers, digital nomads, WFH from Tulum in the Winter

The leading indicator of success though is Nico’s obvious customer obsession.

He pours over reviews and is hyper focused on the first 10 min of a booking. Ensuring check in is flawless every time

AirBnB is a marketplace. Casai is a hospitality company.

In emerging markets that could make all the difference.

To hear Nico break it down check out the show!

And shoot me a follow for more startup breakdowns every day.
open.spotify.com/episode/5LFh5v…