This deal is the second investment in two weeks in business intelligence for the short-term rental sector, coming after startup OTA Insight's purchase of Transparent. "Follow the data" is the new "follow the money."
Alpine Investors, a private equity firm that buys and builds software and services businesses, said on Monday it would acquire AirDNA, which sells data and predictive analytics software for short-term rentals.
The players didn’t disclose the deal terms. AirDNA, based in Denver and founded in 2014, has never raised venture capital.
“The majority of our R&D [research and development] spend has been on getting the data right for every property,” said AirDNA CEO and co-founder Scott Shatford. “It’s not an easy problem to solve because we track 10 million properties. This acquisition is a validation of our data quality as well as how we productize it.”
The deal comes against a backdrop of activity in the sector. Last week, OTA Insight, a London-based startup that helps hotels track competitors’ rates, announced it had acquired Madrid-based Transparent, which gathers business intelligence on vacation rentals and short-term rentals. OTA Insight has backing from private equity firm Spectrum.
Private equity firm Alpine sees an opportunity for growth in AirDNA, given that there are an estimated 4 million managers worldwide renting transiently.
But it also sees an opportunity for growth in applying the company’s data solutions to other industries, such as hotels and real estate. Anticipating that, Demi Horvat joins as chief operating officer.
Business Intelligence for Short-Term Rentals
But unlike companies like STR in the hotel space, not all of these analytics companies get supplementary live data feeds from suppliers. Resellers such as Airbnb have said that external vendors aren’t able to provide fully accurate business intelligence because of faulty assumptions and errors.
AirDNA and its peers often rely a lot on ingesting publicly displayed inventory and availability to generate their analytics.
Yet the analytic services of AirDNA and some of its rivals, such as Transparent, Alltherooms, Airbtics, KeyData, Mashvisor, have good enough data quality — sometimes through direct data feeds — that customers keep paying.
The startups help analysts optimize their benchmarks for performance.
AirDNA, for example, has offered dashboards, benchmarks, and reports for the short-term rental sector. But it aims to be more than a data provider.
“Our suite of solutions help you answer questions like how to acquire supply, which could involve getting a management contract, and how to figure out your revenue management strategy once you have the supply,” Shatford said. “We’re able to deliver an estimate on a property and price it for the next year by looking at how similar properties in the neighborhood are performing.”
For investors in public companies such as Airbnb, Sonder, and Vacasa, AirDNA also offers analytical solutions.
“It’s answering customer questions like, ‘how do you know what good performance looks like, such as how well were you performing a year ago versus next year’s forecast,'” Shatford said. “‘How can I better communicate what good looks like to owners and managers?'”
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Photo credit: A StayMarquis managed in Water Mill, New York in the Hamptons. StayMarquis is a customer of AirDNA, which has just been acquired. Source: StayMarquis.