Bridges Ventures, a UK-based group with a social impact-driven investment approach, has made the second investment from its new fund by backing the launch of Qbic, a new 'budget boutique' hotel that will officially launch this week in Whitechapel, in London's East End.
Qbic is based on a new hotel room concept developed by two Dutch entrepreneurs called the 'Cubi'. These are prefabricated rooms made to a particular design, which means they can be slotted into existing buildings relatively quickly and with relatively little environmental impact. The aim is to offer both leisure and business travellers a quirky hotel experience but at budget prices, with rooms starting at £59 ($94; €71) per night.
Bridges first came across Paul Rinkens and Paul Janmaat, the entrepreneurs behind the idea, in Amsterdam in 2010, according to Anne-Marie Harris, the partner leading the deal. The firm subsequently spent over three years helping them to develop the concept, identify potential sites, and organise the planning and fit-out processes. The hotel opened its doors last month and will have its official launch this week.
The Qbic deal is in keeping with Bridges' core strategy of investing in under-served areas. Although the new hotel is only a mile from the heart of the City of London, Whitechapel falls into the borough of Tower Hamlets, one of the most deprived local authorities in the UK. Bridges said it hoped to help the area’s regeneration by boosting local trade and employing local people. Around half of the hotel’s staff are being recruited locally, including a large number via a partnership with two local back-to-work charities, Food Cycle and Bike Works.
Harris, who is taking a seat on the Qbic board, told PEI that the location was appealing both from a social and financial point of view. “It's an area that still needs some help, but there are commercial opportunities opening up too. It's clearly up-and coming: we first saw the building two-and-a-half years ago, and there's been some regeneration since then. So in terms of delivering a social impact in the local community, as well as the opportunity for outstanding financial returns, it is a very compelling investment for us.”
Bridges eventually hopes to roll out the concept to other locations in London, around the UK and potentially abroad. In doing so, Harris said the firm would look to draw upon the experience and contacts it has gained from doing similar concept roll-outs in the past – most recently with The Gym, a budget health club chain that it sold in June for almost £100 million, netting a 3.7x return. It also has previous experience in the hotel sector from its ownership of the Hoxton Hotel, a London boutique.
The investment is the second from Bridges' third Sustainable Growth Fund, which recently held a final close on £125 million, well above its original target of £100 million. The new fund has also invested in The Vet, a Bristol-based veterinary service which provides clinical pet care at affordable prices to pet owners, again with a focus on deprived areas.