Loftium co-founders Yifan Zhang and Adam Stelle. (GeekWire Photo / Monica Nickelsburg) Loftium, the Seattle real estate startup that helped people buy homes in exchange for renting out an extra room on Airbnb, has shifted its focus to rentals. The company to providing down payment assistance to potential homebuyers who agreed to split their Airbnb profits with the company. But late last year, Loftium quietly pivoted in a big way. Now it rents out apartments to tenants at a discounted rate if they agree to become an Airbnb host. In an interview with GeekWire, Loftium CEO cited skyrocketing housing prices as the reason for the shift. Loftium’s original offering was popular — the company signed up more than 10,000 customers for down-payment assistance, Zhang said. However, thanks to high housing prices, competition among buyers and the complexity of the mortgage process, many of Loftium’s customers still weren’t able to afford to buy the homes they wanted. “Given how quickly home prices have risen, we realized that a large portion of our customer base were not able to buy a home even with Loftium’s down payment assistance, and that was a very frustrating part of the business,” said Zhang, a finalist for Young Entrepreneur of the Year at the . Loftium CEO Yifan Zhang leads an all-hands meeting at the company’s new office. (Loftium Photo) Similar to WeWork’s business model with office space, Loftium now rents units directly from landlords and then leases them out to its customers. Zhang wouldn’t say how many units Loftium has in its portfolio, but the switch to rentals has let the company expand quicker. Loftium collects rent from customers, as well as a cut of the money from renting rooms on Airbnb. It hopes that those combined income sources outweigh rent the company pays directly to landlords. The new model is easier to scale because Loftium doesn’t have to raise huge loads of capital to help people with down payments, and it’s much faster and easier to lease out units than it is to close home sales. After making the switch to rentals, Loftium quickly expanded beyond its core area of Seattle to Denver and Portland. Further expansion appears on the horizon, as the company has open positions on its for property acquisition leads in Chicago, Los Angeles, Washington, D.C., New Jersey and San Jose, Calif. Loftium today has approximately 15 employees, and it is hiring across a variety of areas. Though still small, the company is anticipating significant growth, and it just signed a lease for a new office space: A single floor at in downtown Seattle totaling 5,600 square feet. The Loftium office. (Loftium Photo) The idea for Loftium struck Zhang, who has founded multiple startups, when she first moved to Seattle. She and her husband bought a townhome and rented out one bedroom on Airbnb. “I was just amazed by the income stream from that,” Zhang told GeekWire in 2017. “Just one bedroom in our three-bedroom condo could cover the vast majority of our mortgage, taxes, and insurance, which was a little crazy.” Technology companies of all sizes are trying to figure out how to disrupt buying a house, which remains one of the most challenging and costly experiences a person faces. A number of well-funded large companies including Zillow, Redfin, Opendoor and Offerpad have decided that taking control of the process by purchasing homes directly, sprucing them up then and selling them to consumers is the solution. In the Seattle area alone, startups such as FlyHomes, JetClosing and others are tackling different parts of the problem. As she ran Loftium, Zhang was exposed to every wart in the homebuying process. Zhang pointed to the mortgage approval process as a major headache. It can be tough to get a mortgage if you haven’t been in a job for more than two years, an issue that could impact tech workers who make good money but tend to jump around. Zhang would like to see potential revenue from renting out rooms on platforms like Airbnb figured into mortgage calculations as well. “We signed up homebuyers, and then we sent them into this complex process of homebuying,” Zhang said. “With rentals, we do get to control the experience much more and create a really good experience for renters and landlords.”
Tesla CEO Elon Musk checks out the Model Y during its unveiling in March. (Tesla via YouTube) Tesla is aiming to raise up to $2.3 billion in newly announced offerings of stock and convertible notes, just a week after CEO Elon Musk told analysts that the . Musk himself will purchase an additional $10 million of common stock, Tesla said today in a . That would add to his status as the electric-car company’s largest shareholder, with roughly 20 percent of Tesla’s shares. The share price was more than 3.5 percent above the previous day’s close during midday trading today. Wedbush Securities analyst Dan Ives said in a note to investors that the offerings were a “clear net positive for Tesla” because they cleared up long-lingering uncertainty over whether Tesla would have enough cash on hand to meet upcoming debt payments. One of the offerings announced today will make $650 million in common stock available, while the second offering calls for the issuance of up to $1.35 billion in convertible senior notes due in 2024. There’s also a 30-day option for underwriters to purchase up to an additional 15% of each offering. If all the options are exercised, the gross proceeds would come to about $2.3 billion before discounts and expenses, Tesla said. Goldman Sachs and Citigroup are acting as joint lead managers for the offering, with involvement as well from BofA Merrill Lynch, Deutsche Bank Securities, Morgan Stanley, Credit Suisse, Societe Generale and Wells Fargo Securities. The company said it would “use the net proceeds to further strengthen its balance sheet, as well as for general corporate purposes.” In last week’s financial report, Tesla for the first quarter of the year, after posting profits for the previous two quarters. Looking ahead, the company has ambitious plans to ramp up production of its Model 3 electric car and move ahead with projects ranging from its Semi truck, Model Y crossover SUV and all-electric pickup truck to electricity-generating solar roofs, a and car insurance. Some analysts worry about the effect of Tesla’s financial losses, the gradual fade-out of federal tax credits and rising competition in the electric-vehicle market. Such uncertainties, coupled with , have led to dramatic ups and downs in the share price over the past year. A year ago, for Tesla’s investors: “Do not buy if volatility is scary,” he said.