Polish company Renters buys the Bulgarian leader in short-term rentals Flat Manager

"They approached us more than a year ago, shortly after Enterprise Investors bought a majority stake in Renters, raised capital and the Polish company served as a platform that started buying other companies in Central and Eastern Europe. The fund contacted us via EY Bulgaria and we started the talks. Until then we had no plans to sell, but we liked that they intend to keep the company, the brand, the team and at the same time we get to become part of something bigger. For us, for the people in the company and for the customers, this is a positive outcome," comments Pavlov.

A Renters expansion

Renters.pl was established in 2005 in Western Pomerania. It currently rents out more than 4,000 apartments on a short-term basis in dozens of locations along the coast and in major cities in Poland. This makes it number one in the number of managed properties in Central and Eastern Europe. According to the company's press release, it is 36th in Rentals United's ranking of the 50 largest property management companies in the world in 2021 and 2022 by number of properties managed.

In 2023, Enterprise Investors bought a majority stake of 80% in Renters and increased its capital. The aim is for Renters to now consolidate the short-term rental market in Central and Eastern Europe by acquiring other operators. The first deals were in Poland, where Renters bought the local Rent Like Home, Sea-View Apartments and the boutique brand for sea and mountain owners ApartView.

Flat Manager is experimenting

The Bulgarian company currently manages 600 apartments in 14 cities and resorts in the country. According to the managers, it is the largest in the Balkans in terms of the number of objects in the portfolio. The majority of properties are rented out on a short-term basis via platforms such as Airbnb and Booking.com. According to information from the company, its turnover from reservations for 2023 is over 3.5 million euros. This income comes from commissions from rental properties and from rents on its own apartments.

The company was founded in 2017 by the entrepreneur Boris Pavlov, who returned from abroad and started renting out a studio apartment in the metropolitan district "Geo Milev" through Airbnb, and then took up on the management of properties. From the very beginning of the development of the short-term rental business in Bulgaria, he has been the face and spokesperson of this yet to be developed industry.

During Covid, the company was able to maintain its business and its team by developing new product lines. The first was the accommodation platform Flataway aimed at digital nomads. It was founded by Boris Pavlov and Teodor Todorov and supported by the Eleven Ventures fund. In 2023, it was separated into an independent company and Boris Pavlov focused on its operational management. That is when Kamen Manev became executive director of Flat Manager. Manev will continue to lead the company following the merger.

In the press release he is quoted as saying: "Merging with Renters gives us the opportunity for even faster and sustainable growth. We will develop our services, raising standards for guests and increasing income for apartment owners in Bulgaria."

The Flatimo product line, which works in the field of long-term rentals and aims to digitize intermediary services in renting and selling real estate, is now to be separated from Flat Manager. At the head of the future company will be the operations director Nevena Borisova, who in recent years has been developing Flatimo services with the help of Georgi Pavlov and the Bulgarian proptech fund 3P1. Boris Pavlov remains a shareholder in these two companies, which are not the subject of the transaction, nor operationally involved with Flataway.

Post-deal synergy

"We want to keep the company we are acquiring because we realize its value and see its huge potential," says Kamil Krzyzanowski, CEO of Renters.pl, as quoted in the press release.

"We will continue to work under the Flat Manager brand, keeping the company's entire team and the previous strategy," adds Kamen Manev.

He also mentions that Renters will implement some of the innovative solutions and technologies Flat Manager has used, across its clients.

"From a business perspective, they're going to start offering long-term rental management as a service as well. They haven't done that before, and when you have the infrastructure for short-term rentals, it's even a lot easier to implement that," Manev comments.

There are also direct matches between the companies - in both cases, managed apartments are also offered through Homes & Villas by Marriott International. This short-term rental platform of the global hotel company aims to compete with Airbnb and Booking.com, although positioned in the high segment. In addition, Renters also has an exclusive collection of Renters Prestige apartments, which have the standards and amenities of a 5-star hotel.