First Free Story (1 of 3)Join Skift Pro
Guesty, a maker of software for for managers of short-term rentals, has raised $50 million in a Series D round of funding. Apax Digital Fund led the round in the startup, with AMI Opportunities Fund and others also taking part.
The Tel Aviv-based startup has raised a total of $110 million since its participation in the Y Combinator startup accelerator, making it the best-funded of its peer set.
Guesty’s tech solutions sit in the shared area of the Venn diagram of real estate technology, property tech technology, and hospitality technology, according to Amiad Soto, co-founder and CEO.
“There are public players in both hospitality technology and also in residential property technology, but in short-term rental software, there isn’t any,” Soto said. “We believe that there needs to be consolidation in our industry.”
Guesty acquired a competitor, MyVR, earlier this month.
“As short-term rental managers become more professionalized and grow in size, it’s not efficient for them to invest in building their own technology,” Soto said, expecting that many of the companies today that have created their own operational tech stacks will eventually outsource much of the work to full-time technology vendors.
“We have than 100 employees working full-time on technology,” Soto said.
Some skeptics say that it’s unlikely Guesty will be able to keep its lead in the short-term rental tech sector for long. In the hotel sector, several publicly held technology companies entered the space years ago and created property management systems used by many major players. For example, right before the pandemic hit, AccorHotels had invited travel tech firm Sabre to begin building a core hotel tech stack for it. Other players in hotel tech include Amadeus, Infor, and SHS.
“Running systems for a single location hotel is very different than running a spread around vacation rental business that’s across many addresses,” Soto said. “In many places, a rental operation is different than how a hotel is structured. The demand side is also different with a different mix of channels, such as Airbnb’s greater dominance in rentals.”
“As for the hotel tech vendors, there’s room for disruption there from startups like Mews and SiteMinder and others,” Soto said, noting that Guesty didn’t plan to tackle the hotel sector as the company sees it as a “different domain.”
Guesty was part of the Winter 2014 class at Y Combinator. One of the things the accelerator’s mentors taught Guesty’s founders was to focus on creating a small fan base of dedicated customers and super-serving them before scaling. Soto credits that focus on polishing the product for the edge the company has had over rivals.
The startup, which helps property managers connect to online travel agencies and other points of sale, has benefited from the pandemic-era boom in vacation and short-term rentals.
In the U.S., summer 2021 reservation volume is 282 percent higher when compared to U.S. summer 2020 volume and 32 percent higher than what Guesty saw in the pre-pandemic summer of 2019, the startup said.
In Britain, the August 2021 reservation volume is 174 percent higher than 2020 and only 10 percent less than 2019.
Those traveling in the UK this summer will pay on average almost 20 percent more for their stays compared to pre-pandemic (2019) prices due to increased demand.