Munich-based software and services vacation rental startup Holidu raised an oversubscribed €104 million (~$102 million) Series E equity and debt round led by existing investor 83North after seeing its year-over-year growth. 100% annual revenue growth in 2021.
The round attracted participation from other existing and new investors, including the latter camp Northzone, HV Capital, Vintage Investment Partners and Commonfund Capital, as well as (the former) Prime Ventures, EQT Ventures, coparion, Senovo, Lios Ventures and possible venture capital.
The €100 million financing also includes a large chunk of venture debt – €25 million – provided by Claret Capital and Silicon Valley Bank. Therefore, the equity portion of the Series E consists of EUR 75 million.
While travel startups were hit hard by the coronavirus lockdowns early in the pandemic, as lockdowns eased later in 2020 and 2021 and platforms adjusted to cater to travelers who opted for more domestic vacations, they reconfigured , vacation rentals are picking up quickly, for example, going further afield.
Vacation homes are also better than other travel options such as hotels (or, uh, cruise ships) for providing attractive private space, and people can feel safer while resting, even as the rollout of vaccines continues to increase. And Holidu and its investors are banking on continued demand.
The German startup told TechCrunch that travel and booking patterns are now largely back to what they were before the 2019 pandemic, with international (vs. domestic) travel bookings up. It also said holidaymakers felt more comfortable planning ahead again and rebooking a month or so earlier than when people switched to shorter time frames during the height of COVID-19 uncertainty.
Post-pandemic (or, well, post-crisis peak), demand for travel has rebounded sharply as many people are eager to finally leave again – reflected in Holidu’s larger increase in bookings in 2021 (100%) versus 2020 year (about 50% year-on-year growth at the time).
The company said its vacation rental metasearch engine, which compared listings on more than 1,500 websites, attracted more than 110 million visitors in the past 12 months. And – with new funding – Holidu is gearing up to further its growth momentum by supporting its go-to-market efforts by expanding its presence in local office locations.
The second part of its business aims to increase supply through a game of software and services called Bookiply, aimed at vacation rental hosts – helping them bring properties online by simplifying management and enabling them to increase bookings.
The startup said the segment grew 13-fold between 2019 and 2022. In 2021 in particular, Bookiply’s revenue will grow 4.4 times — and in the first nine months of 2022, its revenue will grow 3.3 times. While the number of homes under Bookiply’s management has grown from 5,000 three years ago to nearly 20,000 now – it appears to have plenty of room to keep building.
“As a whole, we’re growing at double-digit rates,” CEO and co-founder Johannes Siebers told TechCrunch.
“We see our company delivering real value to hosts and guests, which is reflected in our very strong host retention and guest satisfaction. We will now expand our approach by region, into Europe which is large and attractive custodial market. This funding round is a huge vote of confidence in the current environment. We are on the path to building a major company,” he added in a statement.
Holidu’s growth has been driven by multiple acquisitions in key markets – Holidu last year acquired Spain-Holiday.com, an established holiday home portal; and earlier this year several German-focused marketplaces (Lohospo and my.IRS) ) to enhance its service in the DACH market (Germany, Austria, Switzerland).
“With the Series E, we are open to further acquisitions on the supply side,” Siebers also told us.
While the startup reported that its search business was profitable as early as 2020, he said it remains focused on scaling — saying it’s too early to consider an IPO at this stage (note: Holidu was founded in 2014).
“With almost 20,000 Bookiply properties, we think it’s still ‘early stages’ for us,” he said. “The global market is very large, and we are fully focused on expanding our property base in new and existing regions, as well as developing our products for both hosts and guests.”
Discussing a trend that has accelerated over the past three years, he flagged vacation rental adoption as a megatrend — a McKinsey study found that 43% of travelers booked a vacation rental for the first time in 2021, and reported that three of those – A quarter of respondents plan to stay in a vacation rental for at least half of their future trips.
The flexible working model created because of the pandemic has also led to an expanded travel season, Siebers said, saying they are seeing increased demand for “weekday” bookings outside of core school holidays.
The final (paradoxical) trend he points to is the demand for “sustainable” vacation rentals, with properties tagged with the “eco” tag being 12% more likely to click through and 29% more likely to convert than other properties. . The absence of such a label – suggests that travelers are looking for ways to offset any environmental guilt they may feel about jetting by taking steps to reduce their vacation’s overall emissions.
One growing trend that Seabers didn’t mention is rising rents for long-term tenants looking for a place to live.
The cost of living crisis is fueling inflation and interest rates, coupled with chronic shortages of affordable housing inventory in many areas, but holiday rents complicate the situation by further reducing the number of accommodation units available for long-term tenants.
The trend has sparked a new wave of calls for regulators to outlaw short-term rentals, which could encourage more towns to take steps to limit vacation rentals — especially in cities and regions that are also popular tourist destinations. As such, rising housing costs are a pressure point that could present some of the bigger hurdles to future growth in the vacation rental industry over the next few years.
This report corrects the total raised after Holidu provided us with an erroneous (rounded down) figure for the amount originally raised in euros.They told us they had raised 100 million euros – but then said the actual amount was 104 million euros – so we revised the numbers