Airbnb rival 9flats shuts down office in Berlin

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After Airbnb celebrated exemptions to new restrictions on rental apartments in Berlin, 9flats gave the city up – though also for other economic reasons.

Peer-to-peer rental platform 9flats, founded in 2010 and headquartered in Hamburg, announced Tuesday is shutting down its office in Berlin, with 25 employees – most in marketing or customer service – losing their jobs. According to 9flats founder Stephan Uhrenbacher, the move is in response both to the new regulations and a struggle to keep up with rivals Airbnb and Wimdu. 

Last Thursday, the state parliament in Berlin passed a new law to prevent the “misappropriation of housing”, including the improper use of apartments as short-term holiday rentals, which is seen as a contributing factor to housing shortages in Berlin. On Friday, Airbnb republished statements by representatives of Germany’s CDU and SPD political parties that suggested the “sharing economy” and the occasional rental of private homes would continue to be allowed.

For Uhrenbacher, these concessions came too late – and, he said, they’re not yet clarified by law. Investment decisions for 9flats were made before the law passed.

He did emphasise that the new regulations are not the sole reason for the office closure. Rather, 9flats has been locked into a tough competitive situation with Wimdu and Airbnb for some time and is, by its own assessment, the weakest player.

“Airbnb is just as dependent as we are on commercial apartment rentals in Berlin. However, the ban hits the giant much less hard because it is spread over more locations than us. For us, Berlin is the most important location – with 9flats, it hits the smallest and most vulnerable of the competitors,” Uhrenbacher said (translated from German).

While US player Airbnb raised $200m in investment funding in October 2013 and the Samwers’ Wimdu raised $90m in 2011, 9flats received “only” a low double-digit million financing round – and now, less success, at least in Berlin. Despite double-digit million revenue this year, the company hasn’t reached profitability.

Now, 9flats will continue to offer accommodation in Berlin but within the new legal boundaries. It will maintain about ten employees at its main office in Hamburg.

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