Managing Airbnb rentals can be a burden. On top of making your house look perfect for guests and all the maintenance that goes with that, you need to make sure that you are being paid promptly. In the current model, there is an inevitable lag between stays and payments. Thankfully, Payfully is giving you the ability to make sure you are being paid before the guests even arrive. This means no more waiting around for your payment to come in from Airbnb! You deserve to be paid before hand, so say goodbye to cash flow problems and say hello to Payfully.
AlleyWatch got in touch with Daniela Birnbaum to discuss the company’s place in the sharing economy and the company’s most recent round of funding.
Who were your investors and how much did you raise?
We raised a $300K seed round from angel investors and friends.
Tell us about your product or service.
Payfully is a service that offers cash advances for Airbnb hosts. This means, hosts can receive the payment of their upcoming reservations once the booking is completed. This means Airbnb hosts don’t need to wait for their guests to check-in to get paid.
What inspired you to start the company?
We realized that many gig-economy workers were constantly suffering from cash flow problems and decided to create a service that offers a more efficient alternative to those offered today.
How is it different?
Payfully offers Airbnb hosts the possibility to get paid as soon as the booking is confirmed. They don’t need to wait weeks or months to receive their payment. Hosts can easily request an advance payment directly from Payfully and get their money within 24 hours.
What market you are targeting and how big is it?
We decided to target the Airbnb ecosystem first as it represents one of the largest gig-economy networks. 80M nights were booked through Airbnb in 2015 and this is expected to grow in the mid double digits for the next 3-4 years.
What’s your business model?
We advance the host the total amount of their reservation minus our fee. When Airbnb process the host’s payment, we get paid back the full amount. Similar to factoring of receivables, we are buying the Airbnb hosts receivables.
How are you planning for the regulatory uncertainty associated with Airbnb?
While there will surely be regulatory bumps along the way, Airbnb has grown to a point where it’s sort of its too big to go away. Legislation will probably be enacted to regulate illegal hotels but we believe that occasional use of Airbnb, which represents most listings, is here to stay.
What are the biggest challenges that you faced while raising capital?
Raising money is very time consuming, doing so effectively while pushing day-to-day product development and operations along was a challenge for us. Luckily, we have several co-founders and were able to distribute responsibilities while helping each other out.
What factors about your business led your investors to write the check?
A combination of it being a simple, easy to understand idea along with it involving a hugely popular, well known unicorn (Airbnb) was most helpful in the fundraising process. Lastly, being first to market in offering this service to Airbnb hosts has an appeal to it, which was appreciated by investors.
What are the milestones you plan to achieve in the next six months?
Our biggest milestone within the next six months will be to launching Payfully on another network aside from Airbnb. We will do this while taking advantage of our first mover position within the Airbnb host community.
What advice can you offer companies in New York that do not have a fresh injection of capital in the bank?
My biggest piece of advice would be for them to have a clear idea of the product they envision and the problem they are solving. Most importantly, they should have the ability to clearly articulate this vision to investors, people they want to employ and most importantly users.
Where do you see the company going now over the near term?
Over the near term we expect to grow many other networks, in effect becoming a one-stop shop for customers who use more than one network.
What’s your favorite rooftop bar in NYC to unwind?
We like the Brooklyn Barge, it’s not really a rooftop bar, but its outdoors and has a killer view.