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Travel startup Holidu said on Wednesday it had closed a Series D financing round of $45 million. The Munich-based business, which focuses on the vacation rental sector, has now raised more than $120 million since its founding in 2014.
83North led the round, with Prime Ventures, EQT ventures, Coparion, Senovo, and other investors also participating.
Holidu got its start with its flagship product of a consumer price-comparison engine for finding vacation rentals. It recently added a subsidiary called Bookiply, which is both a property management system and a channel manager for holiday homes — catering to managers handling between 1 and 10 homes.
“Vacation rentals are a very competitive market and Holidu’s growth throughout the pandemic has been highly impressive,” said Laurel Bowden, partner at 83North and new Holidu board member. “We are attracted by their strong operating efficiency and proven ability to grow market by market.”
Holidu said its search business became operationally profitable during the pandemic. In July 2020 alone, more than 27 million travelers used its website. The company said its bookings in 2021 are already significantly higher than pre-pandemic levels of 2019.
Holidu has relied on technology to stand out in the market. Unlike in flight search comparison, where airlines have agreed to assign a unique global identifier for each flight, the vacation rental market doesn’t have a standardized identification system. That makes it difficult for companies like Holidu to distinguish between houses listed on 1,500 different sites, including Booking.com and Vrbo — but not Airbnb currently.
Major online brands pay to advertise on Holidu, primarily using a revenue share model rather than metasearch’s traditional cost-per-click model.
To solve the challenge of “de-duplicating” listings, Holidu created an image recognition technology. The software compares similar images to see which suggest a match. It combines that intel with a property’s GPS coordinates. The tech can often identify distinct rooms within properties.
“When Kees Koolen, the former CEO of Booking.com, visited our offices and saw the image-recognition technology, that sold him on becoming an angel investor because he knew how hard of a technical problem that was to solve,” said CEO Johannes Siebers, who co-founded the company with his brother Michael.
Holidu claims 95 percent accuracy with the automated identification. But for tough judgment calls, Holidu has to supplement it with manual reviews.
Mixing B2B With a B2C
Holidu has also stood out from other search players by developing a side business in software and services. In 2016 it launched the Bookiply brand, which has become the largest supplier of vacation rentals in destinations such as Mallorca in the Balearic Islands, Canary Islands, and Sardinia.
Bookiply (which rhymes with “multiply”) is software that lets managers distribute on many big brands, such as Vrbo and Booking.com. The tools help managers make sure they have high-quality images of their properties and good search engine optimization practices for Google.
The tools also smooth processes for handling guest payments, figuring out the best rates to set in light of demand changes, and other operational tasks.
“We have been quick to build new features that users want in the current situation, for example, flexible cancellation and payment solutions,” said Michael Siebers, chief technology officer.
Holidu and Bookiply have more than 250 employees, with local offices in 10 destinations. Holidu operates in 21 markets and this year has been ramping up its growth in the U.S. market, starting with the hire of Stephen Thresh, who had been Booking.com’s regional director in North America. The latest funding round has led it to ramp up hiring.
“In the end, vacation rentals are still a very personal business, and many of our customers aren’t professionals,” Johannes Siebers said. “It’s not easy to do remote selling or remote account management. On the other side, once you win confidence, the owners often give us their content exclusively for distribution. It’s not a contractual requirement, but they do it because they like the product and service.”
“Many other platforms don’t so much focus on the really individual hosts as we do, and they instead go for multi-property owners and professional management companies,” Johannes Siebers said.
“They’re missing a very, very big market with a huge need,” Siebers said.
In many regions in Europe and the U.S., much of the inventory is still actually managed by quite small companies.
“In Germany, there are regions where the share of online bookable inventory is just 20 percent,” Johannes Siebers said. “We give them the technology to make sure their inventory is always synchronized and so forth, and it’s unlocking inventory others don’t have, which makes us appealing to travelers seeking breadth of coverage.”
Heading into the pandemic, Holidu competed against HomeToGo, the most funded pure-play metasearch for vacation and short-term rentals. See Skift’s February story: Startup HomeToGo Is Defying Conventional Wisdom in Vacation Rental Search.
Competitors on All Sides
Other vacation rental search aggregators include VacationRenter, which said it exceeded more than $1 billion in gross bookings in 2020.
Holidu, HomeToGo, and VacationRenter are going up against Google, Trivago, Kayak, and other global brands with access to more traffic.
Johannes Siebers said the startup could hold its own through a mix of better at identifying unique properties correctly and having more unique inventory thanks to its Bookiply business.
“We’re aggregating inventory from more than 1,500 suppliers, and that’s growing with almost 100 new suppliers a month,” Johannes Siebers said. “Vacation rentals also have much more price discrepancy across agency listing services than hotels do because of how the market has evolved and commission structures, etc. So we’ve been providing real value also to the traveler versus if a traveler only uses the biggest online travel agencies to find places to stay.”