This co-living startup that turns brownstones into dorms raised $7.3 million in funding
Five years ago, Hargreaves jumpstarted a technology education startup called General Assembly that teaches technical skills to close the gap between what traditional universities teach and what the workforce needs. He quickly realized that there was another untapped need: a slew of GA students, among others in the city, were unable to find cheap housing.
His startup, Common, was born.
"You need 40 times the rent typically and two years of tax returns to show your income, pretty much an unobtainable barrier for most of our students," Hargreaves told Business Insider. "Then you'd risk going to Craigslist and end up with strangers. It's a bad customer experience."
Common raised $7.3 million in funding last Thursday, with San Francisco-based VC firm Maveron leading the round. Maveron was co-founded by Howard Schultz, the CEO of Starbucks, who also supported GA.
The community co-living company - which allows you to pay on a month-to-month basis - is particularly appealing to freelancers, travelers with wanderlust and those without static careers.
Much like a college dorm, there will be "live-in-RAs" to ensure a safe environment. You can also screen for roommates and specify preferences. Since Common is renting out entire Brooklyn apartments instead of just individual rooms, the program has access to roof decks, backyards, garden floors and other amenities that are typically off-limits for renters.
Hargreaves is in the process of landing some apartments in the hip Crown Heights and Bedford-Stuyvesant neighborhoods.
"We say, 'it's not as sexy as Manhattan, but we can deliver a lot more value at a better price," Hargreaves said. "Brooklyn has really exciting night life and retail, and frankly, it's real close to transit."
None of the funding will actually go towards buying the buildings, as they're purchased through an entirely different pool of capital.
"The capital that we raise for the operating company is making sure that we're building a great product, investing in software, infrastructure and team to do things like making sure our members are in a fun environment," Hargreaves said.