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Vacasa, the property management service for vacation rentals, said Tuesday it had raised $108 million in investment led by existing investor Silver Lake, with Riverwood Capital and Level Equity also taking part.

The U.S. private equity firm first took a stake in the Portland, Oregon-based company last October.

Vacasa didn’t say if the latest round placed a lower valuation on the company. Given that the round was smaller than the $319 million Series C, a drop in valuation seems likely.

The company did say the new funding will allow it to bring back the vast majority of workers it had furloughed.

Since mid-May, Vacasa’s booking window has normalized to the same 40 days out average as last year.

“We see a snap-back in the pent-up demand for professionally managed vacation rentals that we had hoped for,” said Matt Roberts, who became CEO in February weeks before the crisis hit. But, several key markets, such as California, have still not reopened.

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Some customer behavior has changed, Roberts said. The search terms that some people are using are ones Vacasa seldom saw people searching for before, such as ‘superclean vacation rental’ or ‘clean vacation rentals near me with a pool.’ Since the crisis, Vacasa has begun practiced stricter disinfection in its cleaning procedures.

Silver Lake’s Bet on Travel

Silver Lake, a mid-size buyout business with about $40 billion in assets, has been betting on travel lately. In April, Airbnb secured a $1 billion investment in debt and equity securities from Silver Lake Partners and Sixth Street Partners. It gave investors warrants that they can convert into shares later. The same month Expedia Group raised $3.2 billion, including $1.2 billion in non-voting and non-convertible preferred stock from Silver Lake and Apollo Global Management.

The Airbnb and Expedia Group investments give Silver Lake peeks into those company’s businesses, and that could inform how investors assess the value and strategy of Vacasa.

“The crisis will probably accelerate the share shift that was already taking place from hotels to alternative accommodations, and that’s all good news for us,” Roberts said.

Vacasa may also see an easier time in signing up owners of properties to its services, he added.

“The crisis gives us a new pitch to owners who self-manage their properties and who may not want to take on the new cleaning standards that will be here for a while,” he said.

But the main pitch for owners already using a different service will remain the same as before, he said.

“Our centralized marketing and pricing skills that we get from our scale and tech can make more money for homeowners than smaller property managers can offer,” Roberts said.

“In certain circumstances, Vacasa can fairly accurately estimate what an owner will make with us,” Roberts said. “We can compare that with what an owner has told us they made in revenue in the prior year. So when we can do better, we guarantee it.”

Exit Possibilities

An initial public offering may be one exit for the company, which has raised a total of $626.5 million in private equity funding — more than any other startup of its category.

Roberts stepped into the top job in February after Vacasa’s founder Eric Breon left the CEO role to enable the company to have a leader experienced in the next stages the company might face.

Roberts had spent a decade with OpenTable, the online restaurant booking service, as its chief financial officer from 2005 through the company’s initial public offering and then later as its CEO for several years. Roberts joined Vacasa’s board in November 2018, he said.

Is Vacasa looking to go public?

“Relative to financing steps along the way, it’s just about whatever makes sense for the business at the time,” Roberts said, without sharing any sentiment about an initial public offering. “Our core group of investors said, ‘We believe in you and want to support you so you have the capital on board to stay on the offense.'”

Crisis Management Advice

Roberts’ experience of leading OpenTable during the financial crisis informed how he handled the coronavirus pandemic.

“Act quickly to adjust the business, that’s a first rule for crisis management,” Roberts said. “You almost never look back at a situation and say you acted too quickly.”

“Communication is the other key part,” Roberts said. “Say what you know. Be up-front about what you don’t know.”

“The third step is to think about a positive, forward-looking message,” Roberts said. “Every crisis is an opportunity for a positive change in a business model. If you can change the conversation about what you can do better after this is over, that starts to take the doom-and-gloom out of people’s minds, both for your team and your customers.”

Photo Credit: A mountain cabin in Sevierville, Tennessee, that's managed by Portland, Oregon-based property rental management service Vacasa. Vacasa