Bungalow Living, a richly valued startup that rents and manages shared living spaces, has warned some of its landlords in recent days that it doesn’t intend to pay rent next month. In emails, the company cited rental market declines in major cities as a reason to break its deals. “Our ability to pay going forward is in serious question,” the company wrote.
But the developments mark just the latest challenge for the startup, which has raised $118 million in equity and debt from investors including Founders Fund, Atomic and Khosla Ventures since its founding close to three years ago. Bungalow already had been struggling with rising vacancies and missed growth targets, amid mounting complaints from tenants over maintenance issues, according to tenants, homeowners and former employees.