Munich-based software and services vacation rental startup Hollidu has paid off its coffers with a €104 million (~$102m) Series E funding round led by existing investor 83North, just over a year in the making. Annual revenue increased 100% by 2021.
The round saw participation from the latter camp Northzone, HV Capital, Vintage Investment Partners and Commonfund Capital and other existing and new investors including (formerly) Prime Ventures, EQT Ventures, Coparion, Senovo, Leos Ventures. and potential ventures.
The €100m raise includes -25m of limited venture debt arranged by Clear Capital and Silicon Valley Bank. Therefore, the Series E equity component will hold €75M.
While travel startups were hit hard by the coronavirus lockdowns at the start of the pandemic, in 2018 As lockdowns ease in 2020 and 2021 and travelers opt for more domestic vacations, vacation rentals have increased rapidly to meet the restructured demand. For example, going to another place.
Vacation homes are better positioned than other travel options such as hotels (or, cruise ships) to provide attractive private spaces where people can take a break, although vaccine emissions are still on the rise. And Hollidu and his investors are banking on that increased demand.
German startup TechCrunch reports that travel and booking patterns have now largely returned to resembling the pre-pandemic picture from 2019, with an increase in international (versus domestic) travel bookings. He also says holiday makers are more comfortable re-planning ahead of time and booking a month in advance with the shortened time frames they’ve changed due to the uncertainty of Covid-19.
After the pandemic (or, post-crisis-high-high-crisis), the demand for travel has increased significantly, as many people are finally anxious to get away again – this is reflected in the huge growth recorded in the holiday in 2021 (100%) compared to 2020 (increasing by around 50% yoy).
The vacation rentals metasearch engine, which compares listings from more than 1,500 websites, said it had more than 110 million visitors in the past 12 months. And – with fresh funding in its back pocket – Holliday is gearing up to press even further on the growth gas by expanding local office space to support its market expansion efforts.
The second line of business is targeting vacation rental hosts to increase their offering through a suite of software and services called Bookply – helping them find their properties online by streamlining management and supporting them to grow bookings.
The startup segment grew by 13x between 2019 and 2022. In 2021 specifically, Bookplay’s revenue growth was 4.4x – and for the first nine months of 2022, its revenue grew 3.3x. While the number of Bookply homes it manages has grown from 5,000 three years ago to nearly 20,000 – it sees plenty of room to build on that.
“As a team, we’re growing at a high double-digit rate,” CEO and founder Johannes Sibers 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 grow our region-by-region into Europe’s large and attractive hosting market. This financing round is a great vote of confidence in the current environment. We are on the way to build a company,” he added in the statement.
Holidu’s growth has been fueled by several acquisitions in key markets – Holidu last year buying veteran holiday home portal Spen-Holiday.com; and by acquiring two vacation rental service firms focused on German-speaking markets (Lohospo and my.IRS) earlier this year to increase services in the DACH markets (Germany, Austria, Switzerland).
“With the addition of Series E, we are open to additional acquisitions on the supply side,” Siebers told us.
In the year Although the startup reported reaching profitability in its search business in 2020, it said it was focused on scale — too early to consider an IPO at this stage (NB: Holidu was founded in 2014).
“We still consider it ‘early days’ for us at around 20,000 Bookplay properties,” he said. “The global market is huge and we are fully focused on expanding our property base in new and existing locations and working on our products for hosts and guests.”
Discussing a trend that has accelerated over the past three years, he pointed to vacation rental adoption as a big one — pointing to a McKinsey study that reported 43 percent of travelers will book a first-time vacation rental by 2021, and three. – A fourth of respondents plan to stay in a vacation rental for at least half of their trips in the future.
Flexible work patterns created by the pandemic are expanding travel seasons, Siebers said, adding that he has seen more booking demand for “shoulder seasons” outside of major school holidays.
And the last (opposite) trend he’s flagged is the demand for “sustainable” vacation rentals, with holiday-labeled accommodations that are “eco” rated 12% click-through-rate and 29% higher conversion rates than properties you don’t have such a tag on—travelers are spending their vacations on the whole spectrum of excellence. They look for ways to offset any environmental guilt they feel about destroying it by taking steps to downsize.
One growth trend Siebers didn’t mention is rising rents for long-term renters looking for affordable housing.
Housing costs are compounded by the cost of living driving inflation and interest rates, coupled with a lack of long-term affordable housing supply in many regions, but vacation rentals reducing the number of units available to long-term renters.
The trend is fueling a new wave of calls for regulators to regulate short-term rentals, prompting more cities and towns to take steps to limit vacation rentals — especially in cities and regions that are popular tourist destinations. So rising housing costs are one pressure point that could put some serious obstacles in the way for the growth of the vacation rental sector in the coming years.
This report has been updated to correct the total amount received after Holidu initially gave us an incorrect (rounded) figure for the amount of euros collected. They told us they raised €100M – but later said the real amount was €104M – so we revised the figures.
