Update: On November 2, Roomi informed CNN Business that a round of funding it had anticipated fell through, forcing it to lay off 40 to 50 of its 63 workers. Founder Ajay Yadav said “it took us all by surprise.” Yadav said the company plans to continue operations and will meet with the board and investors about the best way to move forward.
“The whole process of finding somewhere to live was very complicated, unfair and frankly painful,” he recalls.
He was 18 and using sites like Craigslist to find rooms to rent near his university’s New York City campus. “As a student, I could only afford to rent a room from someone,” he says.
But when he found a room in an apartment he liked, he didn’t always get along with his roommate. “I’d get all the details about the room on Craigslist, but I had no idea about the person behind the listing,” says Yadav, who is now 30.
“There was no transparency about the person who wanted to become my roommate. They really didn’t have to tell me anything about themselves on the listing.”
Yadav changed apartments close to a dozen times while he pursued his degree in software engineering at the New York Institute of Technology. It was always a crapshoot. One of his roommates even disappeared with all of his belongings when he was on vacation in India.
Every time he had to move, he feared being stuck with someone he had very little in common with or just couldn’t trust.
Yadav was convinced that he wasn’t the only one having a hard time finding a good roommate.
The thought triggered an idea: What if he created a service that better matched renters with roommates based on shared interests and personalities? And what if the app could verify both the person listing a room for rent and the person seeking one?
In 2013, Yadav got to work, bootstrapping the effort with his own savings. “I was essentially a one-person operation,” he said.
Yadav gathered apartment listings by reaching out to people directly using Twitter and online classified ads. He would then compile them on an Excel spreadsheet and post them on Tumblr. Pretty soon he was racking up dozens of users.
Eventually, he wrote the code for an app, first for Apple’s iOS operating system and then for Android devices. After testing the app for two years, he officially launched Roomi in June 2015.
A safer experience
One of Yadav’s toughest challenges was figuring out how to provide a better and safer roommate finding experience.
“No decision is more important than where we live and who we live with. We want to help make this decision safe for everyone,” he says.
All room listings on the site are carefully vetted. “We have a 24/7 staff of 10 people committed to this process,” said Yadav.
For those listings that raise a red flag, Roomi will request a copy of the lease, utility bill or a piece of mail addressed to the person listing the room in order to confirm their residency.
Each person who lists a room for rent on Roomi also has to provide two clear photos of the bedroom and the shared living space, a photo of themselves, and a brief description about the space.
Currently, 20% of rooms submitted for rent are rejected by the platform because a lister did not meet submission guidelines for the room or, less frequently, because the person was identified as a “scammer.”
Yadav said Roomi will also suspend a user for fraudulently using the platform.
The lister also answers a series of questions about themselves and their roommate preferences.
Similarly, renters fill out a questionnaire when they first sign up. They’re asked if they are smokers, early risers or night owls and how they feel about cleanliness, pets and guests. Roomi confirms their identity through a social media site such as Facebook or LinkedIn.
Upon request, Roomi will also use a third-party agency for optional background checks to make sure its users — both those listing the rooms and prospective roommates — don’t have a criminal record. Currently, about 40% of Roomi’s US users have undergone background checks.
If a background check is successful, the platform marks the user as “verified.” That badge provides an added layer of confidence over those without the badge, said Yadav.
Users can learn more about one another using Roomi’s direct messaging feature, which allows them to share contact information and other details.
Nearly half a million rooms and counting…
In three years, Roomi has grown to 2.4 million users who are predominantly young professionals and college students in their 20s. The service lists 460,000 rooms across 20 cities worldwide, including London, Barcelona and Mexico.
“My mission with Roomi is to grow our verified community and make sure that nothing bad happens to our users,” he says.
With his attention fully on Roomi, Yadav dropped out of college in 2013 and never went back.
He has scored a total of $17 million in funding from investors that include Atami Capital and Great Oaks Venture Capital. “In the beginning, I knew nothing about raising money,” says Yadav. “I must have met 300 people along the way and all rejected me. I kept going until I got that first check for $10,000.”
Today, the New York-based startup has 60 employees and offices in Mexico, India and Spain.
Roomi now brings in “several million” in annual revenue through partnerships with landlords and other real estate companies. Yadav said the business is growing sales by 20% month-over-month, but isn’t profitable yet because it continues to invest heavily in improving the platform. Last year, for example, Roomi launched an in-house service called “RoomiPay,” which lets users set up a one-time or recurring rent payment for a 3% service fee.
The company is also expanding, both in the US and abroad, through acquisitions of rival services like room.me, Symbi, TheRoomRing and Study Abroad Apartments.
“I’m now 30 years old and the process of finding a suitable roommate is still for the most part a journey into the ‘Wild Wild West,'” says Yadav. “With rising city costs, this generation and others to come will only continue to share homes, because they can’t afford to live by themselves.”
Read more: https://www.cnn.com/2018/11/01/success/roomi-app-fresh-money/index.html