Gateway Invests in Racine-based Startup That Turns Short-term Rentals Into Shoppable Showrooms

A Racine startup that seeks to make short-term rentals a real-life marketplace has now been backed by Milwaukee-based venture capital firm Gateway Capital.

Houstr, which received $300,000 in funding, enables AirBNB, VRBO and boutique hotel owners to place products in front of consumers to create brand awareness and drive sales.

“Travelers need to sleep, eat, work, entertain and do everything they’d do while at home when they’re out of town. These moments are golden opportunities for brands,” said Nick Koenen, the company’s co-founder. “Houstr allows travelers to try out a product, buy it on the spot and have it delivered to their home. Conversely, travelers are able to identify what they don’t like and don’t want to purchase. Ultimately, this creates positive experiences and the opportunity to connect on a deeper level for both the traveler and travel host. We believe that ‘retail in real life’ is the future of the hospitality industry.”

While Houstr is not the first attempt at this business model – think large hotel chains that upsell guests on products such as pillows and bath supplies – Koenen believes Houstr can empower owners who couldn’t previously compete in scope and scale with those who own larger properties.

Short-term rental owners can sign up through Houstr and then add products to their individual digital storefronts. Guests have the option to shop from a link shared with them before their arrival, or in their room or home via a QR code. When guests make a purchase, the host earns the majority of the profit. Depending on the product, hosts can earn up to 95% of the gross proceeds. For partner brands, Houstr splits the profit with the host, who keeps 60%, with Houstr taking the other 40%. On a $1,000 mattress sale with a 40% margin, the host earns $240.

“Houstr’s approach to experiential marketing provides a simple way for brands and hosts to drive additional revenue,” said Dana Guthrie, managing partner at Gateway Capital. “Additionally, consumers are able to experience brands in no-pressure, natural settings – resulting in more confident purchases and a better customer experience. It’s a platform that creates value for everyone involved.”

The Gateway Capital Fund is part of the Badger Fund of Funds, a 9-year-old venture capital program designed to invest in Wisconsin-based startups. Gateway Capital focuses on pre-revenue startups in the greater Milwaukee area over a four-year period. The firm has previously invested in Milwaukee-based Tip a ScRxipt and the previously Madison-based startup Geno.Me.


696 696 Gateway Capital