Vacasa Nets $319 Million in Backing for Vacation Rental Management

Vacasa, a property management service for short-term rentals, said Tuesday it had raised $319 million in investment, led by financing from private equity firm Silver Lake. The vacation rental startup has now raised a total of $526.5 million in private equity funding — more than any other startup of its kind.

The company, based in Portland, Oregon, said the deal places a “north of $1 billion” valuation on the company, making it the rental property management sector’s first “unicorn.”

“Our goal has always been to be everywhere our guests want to travel, and while we’ve achieved significant growth year-over-year, there are still gaps to fill both in the U.S. and internationally,” said Eric Breon in an interview. “This new financing will help propel Vacasa into our next stage of growth, and allow us to deepen our investment in technology.”

Vacasa didn’t disclose what ownership Silver Lake took with this investment, the financial terms, or the valuation the investment placed on its business. Existing investors Riverwood Capital, Level Equity, and NewSpring Capital also participated in the capital raise.

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The funding is timely. This month Vacasa completed its purchase of Wyndham Vacation Rentals, paying Wyndham Destinations $156 million in cash and $10 million in Vacasa equity. That was two-thirds less than the $30 million of equity interest that the startup in July first offered Wyndham Destinations, which preferred cash.

Vacasa expects its revenue to nearly double next year. Bringing on about 9,000 Wyndham units will help with that growth.

“The integration of Wyndham Vacation Rentals’s homes into Vacasa’s portfolio will be phased, market by market, over the next 12 months, and we expect full completion by fall 2020,” Breon said. “We’re working on the first three U.S. markets right now.”

Real Estate Play

Vacasa, which runs more than 23,000 vacation rentals on behalf of owners, has more recently been opening real-estate brokerages in a handful of U.S. vacation rental markets to help homebuyers identify vacation homes as a rentable investment.

In September, Breon spoke about his company’s strategy on-stage at Skift Global Forum in New York. Vacasa has little trouble generating demand, he said, because many travelers are eager to find lodging in these destinations.

On-boarding supply is Vacasa’s main challenge, Breon said. Many owners of properties either aren’t used to renting them out or have longtime relations with local property management services. The startup’s real estate efforts aim to help plug the gap.

See the interview, here:

Silver Lake has more than $43 billion in assets and investments, including Omio, the online travel booking service, FlixMobility, the intercity bus operator, and Alibaba Group, owner of online travel agency Fliggy. Years ago, Silver Lake was an investor in Sabre, the travel technology company, and in Qunar, the Chinese travel booking service. Silver Lake currently also holds a stake in LightBox, which provides analytics services to help commercial real estate brokers, banks, and lenders make decisions.

Vacasa said it had hosted more than 20 million guest nights since its founding in 2009.

CORRECTION: An earlier version of this story incorrectly stated that Vacasa is the short-term rental sector’s first unicorn. Its is the rental property management sector’s first unicorn.

Register now for Skift Short-Term Rental Summit in NYC on Dec. 5 and hear Vacasa Chief Legal Officer Lisa Jurinka