GuestToGuest Gets $35 Million: Travel Startup Funding This Week

Each week we create a roundup of travel startups that have received or announced funding that week. The total amount raised this week was more than $62.5 million.

Earlier this week we noted that TurnKey, a vacation rental management company based in Austin, has raised $21 million in a Series C investment round. The company provides marketing and professional management services to property owners in 40 U.S. markets.

But that wasn’t the only big news in Startup Land.

Free lodging may be just a house swap away, but several online marketplaces have been looking for profits by charging fees to play matchmaker between homeowners. GuestToGuest raised $35 million this week in an investment led by MAIF, a French mutual insurance company. GuestToGuest also bought one of its leading rivals, HomeExchange, resulting in a marriage of major home-swapping platforms.

The companies claim to have 400,000 spaces in their combined listings. In two years’ time, the two brands intend to have more than one million travelers organizing their vacations through home exchange via their platforms. Last year 67,000 HomeExchange members alone made 135,000 home swaps across 150 countries, the company says. The plan is to make HomeExchange the premium home swapping network and GuestToGuest the more mainstream service.

That said, building profitable businesses off of budget-minded people looking for free places to stay can be tough. Couchsurfing raised $15 million for its platform in 2012, but the investors got burnt.

A decade ago, the industry consensus was that there were about 30,000 frequent (or more-or-less annual) home exchangers that used membership services (such as Intervac, HomeLink, Home Exchange Club, ExchangeHomes, and Love Swap). The companies charged annual memberships for access to listings, and vetted listers by requiring proof of identification. Teachers and retirees were key demographics.

It is remarkable that it only took the past three years for newcomer GuestToGuest to grow its listings by six-fold to 280,000.

The lack of fees has contributed, though it’s not the first company to offer free listings. Where HomeExchange has an annual membership fee of $150, GuestToGuest is free for basic service, with the option to add services for fees.

A mix of marketing and the success of sharing-economy services like Airbnb and BlaBlaCar may have also helped draw more people to try the concept, though that wouldn’t explain a spike in the last three years in particular.

Hopefully those hundreds of thousands of new GuestToGuest members represent committed long-term home swappers and the company’s projections of growth aren’t over-optimistic.

Here is this week’s other startup news:

>>Hostmaker, a full-service Airbnb management company, has raised $6.5 million in an investment round led by Ventech, a French venture capital firm. Past investors DN Capital participated in this fresh round as well. The business has raised $9.3 million to date. Like the aforementioned GuestToGuest, it provides a full-suite of services to property owners who want to rent out their homes.

>>Travis, a Berlin-based travel tech start-up, has raised 500,000 euros (or $530,000) in a seed investment round by unnamed business angels. At the end of 2016, Travis released its online travel booking solution for event organizers. The tool lets an event organizer embed a white-labeled booking tool on their website to enable attendees to choose from hotel, flight, and rail booking options. Travis and the event organizers collect a commission based on the reservations.

Despite launching only a few months ago, the product has already been used by 44 events, which range in size between 500 and 20.000 attendees, according to the startup. One of the larger client wins has been the Codemotion Amsterdam 2017 event.

You can check out all our previous startup funding roundups, here.