New Delhi: Frontdesk, a startup overseeing over 1,000 furnished apartments across the United States, terminated its entire 200-person workforce on Tuesday after unsuccessful attempts to secure additional funding; according to sources, the mass layoffs occurred just seven months after the Milwaukee, Wisconsin-based startup acquired its smaller rival, Zencity.
The dismissals, affecting full-time and part-time employees and contractors, were carried out via a brief Google Meet call on Tuesday afternoon, as recounted by an employee present at the virtual meeting. CEO Jesse DePinto informed the staff during the call that Frontdesk would be pursuing state receivership as an alternative to bankruptcy.
Despite requests for comment, the company has remained silent. The company’s website indicates its unavailability and a recorded message advises those with reservations to seek alternative accommodations and expect contact within the next two weeks.
Founded in 2017, Frontdesk had previously secured approximately $26 million in funding from investors like JetBlue Ventures, Veritas Investments, and Sand Hill Angels. In an attempt to secure additional financing, Frontdesk pursued a bridge round, proposing a new strategy focused on full building management. Unfortunately, this approach failed, leading to the company’s inability to sustain operations. Despite posting job openings, including a chief of staff position, on LinkedIn just two months ago, Frontdesk’s optimism about raising more capital did not materialize.
The startup’s business model, involving leasing apartments at market rates and furnishing them for short-term rentals in over 30 markets, faced challenges due to upfront costs, capital expenditures, and fluctuations in demand and rates. Other players in the industry, such as Stay Alfred, Domio, Lyric, Zeus Living, The Guild, and WanderJaunt, have also encountered difficulties.
