Kiki and Blackbird say the "girls only" club is still committed to subletting

New Zealand-born startup Kiki and its prominent investor Blackbird Ventures have broken their silence about the startup’s controversial direction pivot back in January, with co-founder Toby Thomas-Smith today taking to social media to make a statement that was timed with an update from Blackbird.

Both posts insisted subletting is still a key part of the startup’s strategy, despite Kiki publicly stating it wasn’t back in January.

Originally named EasyRent, Kiki started out its subletting business in New Zealand before opening up shop in Sydney. In 2023, the business moved to New York to try to break into the US subletting market, securing US$4.5 million in seed funding led by Blackbird in August.

However, it took the industry by surprise earlier this year when it announced plans to rebrand as Girls Who NYC — a “girls-only” social group run almost entirely by men.

This garnered negative attention from the startup community as concerns were raised regarding Kiki’s publicity stunts (including a founder wearing budgie smugglers on a flight and stripping on live television) and internal hiring practices. This included inviting a prospective female employee to “pre-drinks” as the team felt she was too serious during a coffee interview.

At the time, Kiki said that it was largely due to the hiring of its first female employee, and hearing about her struggles making friends in New York, that the founders decided to rebrand and change the business.

This was well-documented in now-deleted Instagram highlights from the Kiki account. Others included details around the company pivot and commentary from the founders stating that one of its major investors, Blackbird Ventures, was supportive of the change, name-dropping investment partner Samantha Wong at the time.

The Instagram stories also claimed that Girls Who NYC expected to lose $200,000 over the next two months and indicated the company did not have a revenue strategy for the new direction. Despite this, the startup also said it expected to IPO in seven years.

Blackbird eventually commented on the fallout, which was reported exclusively by SmartCompany.

“Both Blackbird and the Kiki team recognise that Kiki’s recent social media post announcing its intention to build Girls Club NYC has regrettably caused frustration and in some cases, offence,” a Blackbird spokesperson said in January.

“The team understands the reaction this has caused and has taken on board all feedback.”

In a memo seen by Capital Brief, it was revealed that Blackbird was aware of Kiki’s plans to pivot the business back in December.

Kiki finally speaks out

After weeks of silence, co-founder Toby Thomas-Smith posted on the company’s Instagram on Wednesday to address the backlash against Kiki, citing illness for the delay.

“I have a lot to own and apologise for since put out that post four weeks ago. So firstly I want to apologise to all of you who found our previous update offensive and disrespectful. I was extremely naive referring to Kiki as the first Girls Club in NYC and for not articulating the true reasons behind this direction,” Thomas-Smith said.

“I now understand how saying Caitlin enlightened me to the woman’s focus came across as thinking and acting rashly. It was incredibly offensive to all the woman founders who have been working and researching to improve the safe environments for women to live in. The recent post just did not convey and explain the actual rationale behind this decision.”

Thomas-Smith went onto say that 70% of the users on the subletting platform in Australia and New Zealand were women. He also stated that women engaged with the brand the most.

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“We found that woman were extremely connected to the problem we were solving and related to each other in really special ways, often becoming close friends.”

“Our New York business so far has just lacked this special feeling and strong level of connection in the community which we had in Sydney.”

According to Thomas-Smith, Kiki is still committed to subletting and changing the way people live.

“Because of a missing the connection piece, this is required our full focus the past few weeks,” he said.

“Again, I’m deeply sorry for how I went about communicating this focus in such a poor way. I won’t make the same mistakes again in the future.”

Thomas-Smith did not address any particular concerns raised in January, or mention any firm planned changes for the business.

However, the new post did seem to coincide with another change to the startup’s name, with the account now displaying as Kiki Club.

Blackbird’s Samantha Wong shares update in blog post

In a bit of targeted timing, Blackbird also released a fresh blog post about Kiki on Wednesday, penned by partner Samantha Wong.

In addition to commenting directly about Kiki, the post also highlighted Blackbird’s commitment to funding gender diverse teams. This may have been due to the scrutiny around its investment into Kiki’s all-male founding team and its subsequent conversion into running a social club for women.

However, Blackbird was also recently under the microscope due to publicly investing into 11 all-male founding teams in a row in 2023 — a number that rose after SmartCompany’s exclusive report.

“Despite what you may have read, Blackbird did not back a women’s club, nor did Kiki ‘fail’ in Sydney. We, along with numerous other investors, invested in Kiki to expand its subletting platform, off the back of its strong traction in Sydney, where it was known as ‘EasyRent’,” Wong said in the post.

According to Wong, when Blackbird entered into its 16% investment in the business, EasyRent had been operating in Sydney for 12 months and was profitable, but it had global aspirations and therefore decided to relocate to New York.

“Kiki has only been operational in New York for three months. With 1200 listings, it has exceeded expectations. However, there was an imbalance of supply and demand (not uncommon in the early days of a marketplace), and it does not yet have the community magic that it was known for in Sydney,” Wong explained.

“We backed Kiki based on its world-class early traction in Sydney. Kiki’s recent update explaining that subletting remains essential to their strategy provides welcome clarity and we’ll continue to work with them as they navigate the next stages of the business.”

It’s worth noting that despite assertions that subletting remains an essential part of Kiki’s strategy, this is not consistent with what the business was saying at the time of the pivot.

A now-deleted Instagram story included a caption stating “no subletting anymore”. However, in the same story, Thomas-Smith said the business would look to relaunching subletting “down the track”.

Of course, we don’t know what conversations happen behind closed doors. And perhaps there was simply miscommunication when it came to the role subletting would now play for the company. There was also a distinct lack of detail around what Girls Who NYC would actually do when it was announced.

But the public narrative portrayed by Kiki was that the girls-only social club was a pivot from the subletting business, not an addition.

Considering we’re only now seeing the subletting piece being hard-launched back into the public conversation, from both the company and its primary investor, it could be read into not so much a clarification, but as a backflip.

Wong went on to express Blackbird’s commitment to its founders, prioritising guiding them over commenting on incidents online or in the media.

“Startup founders experiment and learn and sometimes adjust as they go,” she said.

“They do not always get everything 100% right. We see it as our role to provide support to them through the learning, shifting, ups and downs of the startup journey. So that’s where our focus has been working with Kiki over the last few weeks.”

Blackbird also quietly removed mention of the budgie smuggler stunt from its original investment notes blog on Kiki. It was still present in the notes during our original report back in January.

“In the online commentary following the initial announcement, references were made to the stunt in the context of people taking offence,” a Blackbird spokesperson said in a message to SmartCompany.

“We took that feedback on board and removed the reference to it weeks ago.”