Chicago real estate startup Leap raises $50 million

Leap connects brands to the property, a bespoke store design and staff staffing each location. The average customer stays in a room for about two years and pays Leap daily operational fees, Tolia said.

According to Leap, more than 30 brands have opened 50 stores in eight markets, including Chicago, New York, Los Angeles and San Francisco. Local stores operated by Leap include A Pea in the Pod in Bucktown, Public Rec in West Loop and UpWest in Oak Brook.

Tolia said the company is now raising more money because it sees an increase in demand for in-person shopping experiences since the release of COVID-19 vaccines. In 2021, Leap expanded from about 12 stores to 50. The new funds will be used to scale its technology and open more stores.

“It became pretty clear to us early in the pandemic that there would actually be a tipping point at some point where things would pick up a bit and brands couldn’t just keep scaling in e-commerce,” Tolia said.

Real estate technology companies have raised a record $32 billion in venture capital funding in 2021, according to a report by the Center for Real Estate Technology & Innovation. Other Chicago real estate startups that have recently raised money include Cohesion, which makes building management software and is backed by Ken Griffin, Morgan Stanley Next Level Fund and Hyde Park Angels.

Leap has approximately 300 employees, 80 of whom are full-time employees in Chicago and New York. The rest are retail workers in brick-and-mortar stores, Tolia said.

Tolia would not disclose earnings and said the company is not yet profitable. To date, Leap has raised approximately $70 million. Leap’s Series B funding round was led by Chicago-based BAM Elevate, Balyasny Asset Management’s private investments division. Harbor Spring Capital, Northern Trust, Simon, Costanoa Ventures, Hyde Park Venture Partners and Equal Ventures also attended.

“We remain very excited about the future of retail,” said Tolia. “Our strategy is one of the most scalable solutions on the market.”