While renting out rooms in their semi-detached home in Singapore, two friends discovered a growing demand for co-living arrangements among working millennials. The pair, Yoan Kamalski and Zenos Schmickrath, decided to commit to the concept and co-founded Hmlet in 2016.
Hmlet—pronounced “hamlet,” which means small village—simplifies the process of finding a place to live and offers a community with organized activities for those moving into a new city. Its properties include numerous common areas, like lounges and rooftops where members can interact with each other, an attribute that is often absent in traditional shared housing.
“Hmlet’s co-living spaces fulfill a need for affordable, flexible, and secure accommodations that provide a sense of belonging. With apartments becoming more and more expensive, we wanted to make the process of finding a place and moving in as seamless as possible,” said Kamalski, co-founder and CEO in an email interview with KrASIA.
Their business plan was ripe for the market when the company began operating. “The Hmlet model is most beneficial at a time when developers and investors are shifting their focus away from traditional build-to-sell and towards build-to-rent,” said French-national Kamalski.
With a background at the intersection of large-scale real estate management and technology, Kamalski integrated data applications into Hmlet from the very beginning. The company uses data to generate solutions that meet the needs of tenants.
Hmlet operates a full range of co-living properties, from shared housing to private apartments. The firm’s strong relationships with institutional, corporate landlords and family offices give Hmlet access to premier real estate. “Through these partnerships, Hmlet fully customizes the design and renovation of the property to Hmlet’s requirements, efficiently repositioning the properties to unlock their full potential,” said Kamalski.
Kamalski understands the needs of a highly mobile generation of professionals. “Our members tend to be young professionals, aged 25 to 40, who are seeking community-orientated living that is affordable, flexible, and comes with secure contracts. We are seeing a huge demand for co-living spaces, and affordability is a huge concern for people who find it challenging to put up large amounts of money for housing deposits and agent fees, commit long-term, or furnish an entire place themselves,” the entrepreneur said.
“Co-living has emerged as an attractive option for young local and foreign professionals, millennials, and those who simply want to live an independent life from their families, while also wishing to minimize costs in expensive markets,” said Kamalski.
In places like Singapore and Hong Kong, where homes have limited space, Hmlet is providing young professionals with an attractive option as they spread their wings and leave the family nest. Providing tenants with a sense of community can “further encourage connection, collaboration, and combat the issue of loneliness. All members are invited to regular community events. You could say that people join us for the convenience, but stay for the community,” Kamalski added.
For a small one-off fee, tenants can access Hmlet’s membership benefits, like a fully furnished home, utilities, unlimited Wi-Fi, weekly cleaning, maintenance, as well as discounts at F&B merchants and fitness clubs.
“Young professionals are turning to us because Hmlet adds value via a seamless and easy co-living solution that offers not just a home, but a community and connections,” said Kamalski.
Hmlet has a 90–95% occupancy rate and tripled its unit count to 1,500 after expanding to Japan last year. The average stay is 13 months, with 40% of new members joining based on referrals. In all, Hmlet’s members represent more than 50 nationalities. The company currently operates more than 100 locations in Singapore, Hong Kong, Australia, and Japan.
When Hmlet first started, co-living was a relatively new concept in the Asia Pacific. “We knew there was demand for custom-designed move-in-ready homes,” Kamalski said. “The challenge was to sell our vision to investors and landlords that co-living is a viable alternative investment strategy offering attractive returns.”
The company raised USD 1.5 million in seed funding in 2017, followed by a USD 6.5 million Series A round in November 2018, led by Sequoia India. Last year, in July, Hmlet raised a USD 40 million Series B investment led by Burda Principal Investments, with participation from existing investor Sequoia India and new investors Mitsubishi Estate Co, Reinventure Group, and their original angel investors.
The firm is undergoing some changes now. Zenos Schmickrath exited the firm in December 2019. And in January this year, 10% of Hmlet’s personnel were laid off. The firm is shifting how it does business too—it will no longer directly rent, renovate, and operate properties. “Any business at our stage of growth and maturity must evolve to grow faster and smarter. To better deliver on our journey, we have made difficult decisions impacting a small number of colleagues in order to create the necessary capacity to further enhance our operational efficiency, serve our members better, scale up in the right areas and accelerate our growth,” said Kamalski.
The company is setting up a new platform for landlords to manage their own properties under the Hmlet brand. The company will fold in more landlords to the new platform and provide them with access to various services like data on tenants. “We are currently experimenting with several new and innovative ways to disrupt the real estate ecosystem, maximizing returns and investment yields for our landlords while continuously offering amazing experiences to all our members,” said the CEO said.
“We are focused on investing and driving growth. While that may appear to show up as a high cost base, our model and how it’s evolved consistently prioritizes unit economics over everything else. In that regard, we view our model as highly scalable yet sustainable, and we have put processes in place to assure we can turn profitable when our investors require,” said Kamalaski.
“It’s a fine balance between growth and profitability, and we consistently tread between the two to find the right balance. Also, investing in technology is a priority, and a lot of these investments won’t show returns for a few months, but are imperative to our growth trajectory,” he added.
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.