Who said investors no longer want to bet on consumer-facing travel startups that compete with Google? HomeToGo is in talks to go public via a blank-check company owned by Lakestar. It'll be an approximately $1.2 billion deal, sources tell Skift.
Vacation rental search startup HomeToGo has signed a non-binding letter of intent to merge with a blank-check firm controlled by European venture fund Lakestar, the companies said in a statement on Friday.
Lakestar is a venture capital investor in the Berlin-based HomeToGo. It owns a blank-check firm, Lakestar SPAC I. The companies said in a statement on Friday that they “continue to be in mutually exclusive negotiations with the aim of entering into a binding business combination agreement in due course.”
According to people familiar with the matter, the proposed transaction would value HomeToGo at about $1.2 billion (€1 billion), including debt. The sources asked not to be identified because the talks are private and could still fall apart.
In response to our query, a HomeToGo representative said, “Due to legal restrictions with European markets we are not allowed to comment on the matter at this time.” Representatives from Lakestar said they couldn’t comment.
HomeToGo, a price-comparison search service for vacation rentals, has had a robust revenue stream in the past year thanks to surging domestic travel interest in vacation rentals.
It’s the latest company to explore going public via a special purpose acquisition company, or SPAC. Some startups see SPACs as a quicker and simpler way to go public than a traditional bank-led initial public offering, or IPO. SPACs sell stock on listed exchanges first and then find companies to merge with.
SPACs have grown in popularity in the past year. (See Skift’s SPAC explainer for more.)
Accor Hotels entered the SPAC market last month. Sonder’s SPAC deal will take the hotel and short-term rental company public later this year at a $2.2 billion valuation. Inspirato may go public in a $1 billion deal, Rosewood Hotels is looking to do a SPAC listing, and other travel companies are exploring SPACs.
HomeToGo’s Big Year
Lakestar’s special purpose acquisition company, Lakestar SPAC I, raised about $335 million (€275 million) in a February initial public offering with an intent to “seek a business combination with a late-stage European tech company.” The blank check company is sponsored by Klaus Hommels, founder and chairman of Lakestar Advisors. CEO Stefan Winners and Inga Schwarting, chief information officer, run the blank-check company.
The proposed transaction would let Lakestar’s SPAC acquire or assume all of the outstanding equity and equity equivalents of HomeToGo, the companies said in today’s public statement.
The current HomeToGo management team of CEO Patrick Andrae and Wolfgang Heigl would remain in place, sources said. Lakestar is preparing to pitch institutional investors on the deal, according to people familiar with the matter.
HomeToGo is believed to have raised about $176 million in venture capital since its founding in 2014. Back in late 2018, it disclosed raising a funding round of more than $150 million.
In 2019, HomeToGo generated sales of $88 million (€73 million), according to the most recent financial filings available. That was higher than its $64 million (€52.7 million) in sales in 2018.
Skift profiled HomeToGo earlier this year. At the time, company co-founder and CEO Patrick Andrae said: “Our bookings in 2020, subtracting cancellations due to the pandemic, were only slightly below 2019’s level for the full year. Our year-over-year bookings in the summer months were almost 100 percent higher, year-over-year. We also have a good financial cushion.”
Acquisition of Mapify
The news of SPAC merger talks comes the same week that Mapify CEO Patrick Häde confirmed to German business newspaper Gründerszene that his startup had acquired the assets of travel startup Mapify.
The companies didn’t disclose the deal price or terms. Lakestar was also an investor in Mapify.
Mapify began as a social trip planner but more recently started to offer travel packages. The pandemic killed its business. It’s unclear how HomeToGo may use Mapify’s assets.
For more context, see Skift’s earlier report: Startup HomeToGo Is Defying Conventional Wisdom in Vacation Rental Search. Lakestar’s venture capital fund has invested heavily in travel tech. It has also backed Limehome, which manages short-term rentals with hotel-like service by managing the units as licensed hotels. Lakestar also led last year a round of investing in Impala, a software service that offers data about hotel rooms.
UPDATE: We updated this article to remove a statement that Lakestar is a majority investor in HomeToGo. We’ve also removed a reference to Nils Regge, who has not been part of the HomeToGo management team for a few years.
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Photo credit: Example of a vacation rental bookable via vacation rental search startup HomeToGo. HomeToGo