Serial entrepreneur Bill Smith launched Landing in 2019. The furnished apartment rental firm expects $200 million in revenue this year by catering to the work-from-anywhere generation.
Bill Smith steers his midnight silver Tesla X through the streets of downtown Birmingham, Alabama, and pulls into a low-rise apartment complex. “This used to be a brothel 100 years ago,” he says, with a smile.
Today, it’s a modern, renovated building, one of dozens in this old industrial city where his company, Landing, rents fully furnished flexible-lease apartments. A thin man with intense blue eyes, Smith, 36, steps into a sunny one-bedroom with a railroad layout. It goes for $1,800 a month, a 20% premium to what it would rent for empty. It’s decorated with innocuous furniture, inoffensive linens, even taupe dishware, all designed and manufactured by his team. “Someone wants to move into an apartment in five days, we have to be able to acquire it and make it beautiful in a short period of time,” he says, “It looks really simple on the outside, but it’s very complex.”
As the way Americans live and work has changed, Landing offers its members (who pay $199 a year) fast access to move-in-ready apartments with the flexibility to rent for as little as one month. Cheaper than a hotel or a corporate apartment and more predictable than an Airbnb, Landing markets itself to Millennials with the flexibility to work remotely, as well as to others (traveling nurses, empty nesters, those new to a city) who don’t want the hassle of figuring out housing and buying furniture for a temporary stay.
The bulk of Landing’s $200 million revenue (2022, projected) comes from its markup, typically 30% to 40% over what it pays to lease apartments from owners of multifamily buildings, including mega-landlords American Landmark and Northwood Ravin. It operates in 81 markets across the country, but its biggest are fast-growing Sun Belt cities like Las Vegas, Phoenix, Austin, Atlanta, Nashville and Tampa.
Smith sold his previous company, online grocery delivery service Shipt, to Target for $550 million in 2018. He sees a much bigger opportunity with Landing: According to his aggressive estimates, perhaps 10% of the 40 million Americans who live in apartments could choose furnished, flexible-stay homes within a decade.
“Covid pulled forward a change in living that I thought would take five years,” he says. “We think we’ll be doing $1 billion in revenue by 2025 . . . and we’ll still be just scratching the surface of the opportunity.”
Landing has raised $237 million in VC funding, including $75 million (previously undisclosed) at a recent valuation of $475 million. Not bad for a company whose revenue hit $83 million in 2021, up sixfold from a year earlier—but not as much as he hoped, especially given his track record and revenue growth. “If it was December, we’d already be in the billion-dollar club,” he notes, adding that raising money in this market has “not been fun.” One silver lining to remaining a non-unicorn: Landing still qualifies for a spot on this year’s Forbes Next Billion-Dollar Startups list as one of 25 venture-backed companies we think are most likely to reach a $1 billion valuation.
As WeWork’s rise and fall showed, there’s both huge potential in new models of real estate—and enormous risk. Smith is working to manage the risk and operational complexity with data, and lots of it. Which cities have both demand and potential profitability? How can he cut installation costs? Adjust pricing and marketing for seasonality? “This needs to be tech-driven and not people-driven,” says Smith, who relies on his firm’s data and its proprietary algorithm. “I truly believe this is the only way this model will work.”
Smith, who owns roughly one third of Landing and is worth more than $400 million including cash from Shipt, is up for the challenge. “I get bored really easily,” he says. “I’m attracted to solving these complicated problems.”
Smith grew up in Birmingham, Alabama, the son of a Cellular One agent and a medical transcriptionist. He recalls asking for a briefcase for his fifth birthday and later lugging his desktop computer to his dad’s home for weekends after his parents divorced.
He wasn’t much interested in school (“I hated it, I really did”) and dropped out when he was 16. He’d been selling Nextel phones after school, bringing in $5,000 or more a month, a tidy sum for a teenager in Alabama. In 2009, he founded Insight Card Services, offering reloadable prepaid Visa cards. Five years later, at 28, he sold that business to bank-holding company Green Dot for tens of millions.
As a young millionaire, he started snapping up local real estate. He showed up at an auction to buy 33 condos (since sold), then decided on the spot to bid for seven floors in a prewar former bank headquarters known as the John Hand Building. His winning bid: $510,000. “I’m, like, ‘Oh my gosh, what did I just win?’” he says. “The luck was that I started Shipt and was able to fill it up.” (It’s now Landing’s headquarters.)
“Bill Smith is very unassuming, very different from your Adam Neumanns and your Travis Kalanicks.”
In 2014, Smith launched Shipt to offer same-day delivery to customers who ordered groceries online, investing $3 million of his own money. By 2016, Shipt was available in 25 cities across eight states—challenging Amazon and Instacart, especially in smaller markets. With an ownership stake of roughly 50% at the time of the $550 million sale to Target, he was now seriously rich. “It didn’t feel like a huge life change, even though from the outside it would appear that way,” he says. “I live in the same house and go to the same places and do the same things I did before.”
Smith keeps a list of 30-some ideas for businesses in his phone, and after he left Target (as part of the deal, he worked for the retailer for a year and a half) he started thinking about which one to tackle next. Venture capitalists were eager to finance whatever he selected. “If he told me he was doing moon exploration, I probably would have given him money,” says Greycroft’s Ian Sigalow, who led Shipt’s first outside funding round at a pre-money valuation of $45 million and subsequently invested in Landing.
His first try, called Homesie, targeted homeowners who needed repairs, letting them text for help. “It was a total flop,” he says. “We tested it for a few weeks, and literally no one signed up.” Smith shuttered it almost immediately and moved on, transforming the website’s operations and concept into Landing. “Consumer companies are either a rocket ship or they’re not, and if it’s not a rocket ship I don’t want to waste any time on it.”
The basic idea for Landing had been in his phone for years. During his brief stint as landlord of those 33 condos, he had seen how often medical residents at the University of Alabama at Birmingham would take apartments they needed for just a year. And his own experience moving temporarily to San Francisco, one of America’s toughest housing markets, in 2016 while building Shipt, rankled. “I was on Craigslist trying to find a place that was going to work for my family, and it was just a huge headache,” he recalls.
As people gained more flexibility on where to live, he wanted to make it easier for them to pick up and move to furnished, flexible-lease apartments that didn’t cost corporate rates. As with Shipt, Smith put up some initial cash, ultimately investing $15 million.
Landing’s launch was tough. Smith was personally juggling the demands of a startup with those of his youngest child (he has three), who was born with special needs in June 2019 and required multiple surgeries. Then, in March 2020, the pandemic emerged, offices shut and Landing’s fate hung in the balance.
All this has helped keep him humble. “Bill Smith is very unassuming. He’s very different from your Adam Neumanns and your Travises,” says Landing CFO Casey Woo, referring to WeWork’s founder (and Woo’s former boss) and Uber’s mercurial founder, Travis Kalanick. “You generally get the ego or you get less killer instinct.”
A high school dropout, Smith is worth more than $400 million from his startups Shipt and Landing.
While the potential is enormous, it faces plenty of competition—from venture-backed startups in the flexible, furnished rental space, like New York City-based Blueground and San Francisco’s Zeus Living, to hotels that have moved further into extended-stay options. Even Airbnb is pushing long-term stays for remote workers, with durations of 28 days or more its fastest-growing category in 2021.
Running a business like this is also capital-intensive. In addition to the equity raised, Landing has secured $230 million in debt, of which it has drawn down $80 million, to help pay for everything from leases and technology to furniture and shipping. To maximize profitability, it uses its algorithm to help fill apartments, constantly gauging demand, scouting locations and setting prices in real time. Right now it says it has 7,000 apartments rented, with occupancy rates hovering around 90%, but admits profitability is still a few years away.
Rather than sign leases with landlords up front, risking vacancies if no one rents, Landing relies on software to list apartments first (it has 20,000 in its database), then signs leases and furnishes them within a few days once a renter is in place. Having learned from WeWork’s troubles with long-term leases, Landing inks one-year leases with property owners, allowing it to quickly reset prices or exit properties that no longer make sense. “What’s made Landing so successful is that we operate on demand,” says Marcus Higgins, the company’s chief operating officer, who previously worked for SoftBank-backed Oyo Hotels. “This is a giant Rubik’s Cube, and as soon as you get a couple of things right, you have to turn it and do it again.”
That’s particularly challenging, given the itinerant nature of its clientele. Kendyl Cochran, a 25-year-old business development director at Gartner, spent most of the past year living in Landing apartments with her boyfriend and dog after learning about the company on TikTok. “We wanted to do 12 cities in 12 months,” she says. After an initial Airbnb stay, they hopscotched among Landing apartments in Atlanta, Baltimore, Austin, Dallas, Denver, Tucson and Salt Lake City, typically spending $2,200 to $2,400 a month on rent. It was great for them, but each time they moved out, Landing had to find tenants to move in for the remainder of the lease.
As for the apartments’ cookie-cutter design, that’s one key to keeping costs down. The firm manufactures its furniture at factories in Vietnam, where costs are lower. It then ships them back to a 280,000-square-foot warehouse in Moody, Alabama. It also has smaller warehouses in Las Vegas, Austin and Phoenix.
Controlling design meant flexibility when ocean freight costs skyrocketed: Landing’s kitchen chairs are now stackable, allowing it to jam more of them into a shipping container. A new line of furniture in the works includes coffee tables and side tables that will be assembled in Alabama rather than shipped that way, to save on freight. By using its own trucks and drivers and standardizing everything, Landing has shaved installation costs by more than 50% since launch, according to CFO Woo.
The big question, of course, is how many people will want to live month to month in temporary housing, and whether the mobility of the pandemic for white-collar workers will not only continue but remain popular enough to make the financials work. “The world of work right now [is in] a massive period of experimentation,” says Steve Cadigan, a future-of-work consultant and author of Workquake, who was LinkedIn’s first chief HR officer. “The digital nomad has a shelf life until you want to settle down and have kids. The older we get, the more we like continuity.”
Smith, of course, is much more bullish, figuring that the housing market is so big that capturing even his own small sliver will be a huge home run. “Not everyone is going to live like this, and not even the majority will,” he says, “but millions of Americans are going to live flexibly.”
Header image of Landing founder Bill Smith in front of the 1912 bank vault that serves as a boardroom at his company’s headquarters.