Rentberry announces its $1B valuation. Why the deal is likely to be fictitious — investigation by AIN and Molfar

On September 6, 2024, AIN received a letter from Rentberry, a startup with Ukrainian roots. In it, the company announced that it had raised $90 million in investment and is valued at $1 billion, which makes it a new unicorn company.

The startup’s CEO, Alexey Lyubinsky, personally sent the news to AIN. A few hours later, we asked him to send additional confirmation of the deal, but we did not receive a response. Later, Horizon Capital analyst Andrii Brodetskyi expressed doubts about its veracity. We contacted Rentberry’s CEO again for additional information, but there was still no response.

Meanwhile, AIN spoke to an investor insider who also expressed doubts about the reported details of the deal. A few days after the original news was published, we finally received a response from the startup’s CEO. The representatives of the foundations that had invested in the startup — Berkeley Hills Capital and GTM Capital — were also added to the message thread.

Berkeley Hills Capital’s representative, who was listed as a managing partner, sent a letter intended for AIN with a prohibition on distributing it in any way. However, within a few hours, its contents appeared on the pages of other Ukrainian media outlets. In addition, our editors received an agreement document called the Series A Preferred Stock Purchase Agreement, which was also not allowed to be published.

AIN turned to the Molfar OSINT agency to verify the identities of the individuals (names withheld) and the allegations in the letter. 

1.“The revenue figures are incorrectly presented as they only include Rentberry Inc. (B2C). However, the deal includes not only Rentberry Inc. but also Rentberry Holding, which covers B2C, B2B, commercial real estate, enterprise software for retirement homes, and a future network of modular homes.”

In the investment agreement, Rentberry Holding is defined as a group of three companies: Rentberry Inc. and its two subsidiaries, Happy Seniors Inc. and Floorly Inc. Rentberry’s 2023 report states that it reflects the consolidated results of all three companies: “In this report, the term ‘Rentberry,’ ‘we,’ 'us,’ ‘our’ or ‘the Company’ refers to Rentberry, Inc. and its subsidiaries on a consolidated basis.”

At the same time, Rentberry Inc. owns 100% of Happy Seniors Inc. and 99% of Floorly Inc., with the remaining 1% undisclosed. Financial indicators, including ‘Revenue,’ are given to ‘the Company,’ not just Rentberry Inc. That is, there is no mistake in not considering the indicators or business lines of the two subsidiaries.

2.“Rentberry Holding’s ARR is on track to exceed $30 million this year.”

This statement cannot be confirmed, as the company previously had revenues of up to $1 million and only losses, and the company did not submit quarterly or semi-annual reports for 2024.

3.“The synergy between portfolio companies of our foundation (Berkeley Hills Capital) and Rentberry was ignored.”

One of Berkeley Hills Capital’s portfolio companies is Mileberry, a failed startup by Roman Novozhenov, the previous partner of Rentberry’s CEO, which was unprofitable and closed.

4.“The analyst ignored the synergy with WeWork, which is currently in the process of being acquired.”

There is no confirmation that Rentberry is actually going to buy WeWork. The news about it came out back in February 2024. Later, in May, the media published a bankruptcy restructuring plan for WeWork, which provides for transferring the company’s assets to a group of creditors and the developer of the real estate search platform Yardi Systems.

5.“The startup confirms that the Series A deal between Rentberry Holding, Berkeley Hills Capital, and GTM Capital (gtmcapital.com) was successfully closed this year.”

In AIN’s previous communication with Rentberry, GTM Capital was indeed mentioned, but without reference to a specific website. Initially, we thought it was a more media-friendly Florida-based GTM Capital foundation launched by Saqib Awan, with a different website and logo. It is a legitimate foundation, but it does not employ the person mentioned in the letter to AIN and has not invested in Rentberry.

At the same time, there is no information about the other foundation with the website gtmcapital.com:

• The page is empty.

• There are no archived copies.

• A search for the logo yielded no results.

As of 2018, the site was owned by a Ukrainian with 22,000 other websites registered to his email address. He is likely to be engaged in custom web development and is not affiliated with the company.

There is also no information about the foundation’s partner. The address given in the document for GTM Capital is located in a 50-story business center in New York City, and no information was found on who rents this particular office. No legal entities in New York or Delaware with this address were found either.

In the end, a “representative of Berkeley Hills Capital” claims that the valuation is a subjective point of view of the foundation, so the company’s valuation of $1 billion is justified. Still, we doubt the quality of the funds’ statements because Berkeley Hills Capital has only ever invested in companies owned by or related to Lyubinsky or on his recommendation and has a tax debt. Its partner, GTM Capital, is an unknown foundation with no transparent legal entity and no references on the Internet.

Analysis of the investment agreement sent to AIN

1. Analyzing the investment agreement, we can see that the document does not contain the names of the legal entities of both foundations (although Berkeley has a legal entity), even at the end, where there are signatures. This is, firstly, atypical for a true deal and, secondly, creates misunderstandings because there are companies with similar names. Thus, the only confirmation of the truthfulness of the agreement is the signatures of the representatives of the foundations.

2. There are errors in the investment agreement, for example, in the definition of Rentberry holding:

This Series A Preferred Stock Purchase Agreement (this Agreement), is made as of May 1, 2024, by and among Rentberry Holding that includes Rentberry Inc., Floorly Inc., Happy Seniors Inc., a Delaware corporation (the Company), and the investors: Berkeley Hills Capital and GTM Capital (each a Purchaser and collectively the Purchasers).

Further, it is stated that ‘the Company’ does not have any subsidiaries, despite the fact that ‘the Company’ is three separate legal entities: the parent company and two subsidiaries.

Identity of people from the foundations

We also verified the identity of the representatives of the foundations. Apart from the mailing addresses we have, we did not find any information about these people from Berkeley Hills Capital and GTM Capital. The only mention of a Berkeley Hills Capital partner who contacted the editorial office is on Pitchbook, but there is little information about him: name, email, and position. The text of the investment agreement states that both of them (partners of Berkeley Hills Capital and GTM) joined Rentberry’s supervisory board, but the agreement is dated May 2024, while as of September, there is no mention of expanding Rentberry’s supervisory board.

More about the deal and investors

Pitchbook published information about Rentberry’s $90 million investment and billion-dollar valuation without doubt. However, the Pitchbook profile of one of the investors, Berkeley Hills Capital, shows that it is out of business and has made only two investments, including Rentberry, since its inception.

Berkeley made its second investment in December 2021 in the Ukrainian startup Sirocco Energy, a developer of wind turbines for cities, but it later sold its stake in the company. The WeFunder investment platform shows that Berkeley has made three more investments: in SolarGaps, Happy Seniors, and Mileberry.

All four companies were founded by Ukrainians and had ties to Rentberry: in a 2023 interview, Rentberry co-founder and CEO Alexey Lyubinsky said that Rentberry “helped a number of Ukrainian companies raise capital, such as Sirocco Energy, SolarGaps, and many others.”

Happy Seniors is Rentberry’s subsidiary project for finding housing for seniors, and Mileberry was founded by Lyubinsky’s former partner in his previous project CityHour, Roman Novozhenov, and referred to Rentberry as its “big brother.”

Both projects — CityHour and Mileberry — were unsuccessful. Berkeley Hills Capital’s profile on WeFunder has two very favorable reviews for Happy Seniors and Mileberry, which have the closest connection to Lyubinsky.

According to the Delaware registry of legal entities, where Berkeley Hills Capital Inc. is registered, the company has an overdue debt of $464.41 for the 2023 annual tax, including a late fee and several months of penalties.

Another legal entity with the same name was registered in Canada, but it was liquidated in April 2024.

GTM Capital, a Florida-based foundation, was initially believed to be Rentberry’s second investor, but as we wrote above, this assumption was wrong.

Rentberry’s financials

Rentberry’s latest document filed with the U.S. Securities and Exchange Commission provides the following financials for 2022 and 2023:

The notes to the financial statements say that the company’s future depends entirely on the founders’ ability to raise further investment.

Given the revenue growth rate, the revenue in 2024 could reach approximately $1 million. With such financial indicators, the company cannot claim a valuation of $1 billion after nine months from the date of the last report.