Hostaway's first major fundraise fits in with its ambition to grow both organically and inorganically. Given the size of the round, it's likely that there is some acquisition in the offing.
Vacation rental software maker Hostaway has raised $175 million. The funding round was led by PSG Equity, a Boston-based firm that invests in growth-stage software businesses.
Miami-based Hostaway, which also has offices in Toronto, Helsinki, and Barcelona, was founded in 2015 by Marcus Rader, Saber Kordestanchi and Mikko Nurminen to automate and simplify the process of property management, helping property managers scale and grow their businesses.
Its rental management platform allows property managers to work with all key aspects of their vacation rental business, including tools to manage inquiries, to automate repetitive tasks such as reviews and automated messages, channel management, analytics as well as marketing. Hostaway customers manage more than 100,000 properties in more than 100 countries.
Hostaway plans to use the funds from this round to expand globally, grow headcount, and pursue both organic and inorganic opportunities to expand market share. Earlier this year, it signed a distribution partnership with global travel technology provider Amadeus.
“We are impressed with the quality of the Hostaway team, their vision and execution in building what is, in our view, a highly differentiated category leader with multiple levers of value creation,” said Edward Hughes, managing director at PSG. “We believe the company has a significant opportunity to lead this industry, as it continues to scale its integrated platform, expand globally and help its customers meet the growing demand in the short-term rental market. We look forward to partnering with Hostaway in this new exciting chapter.”
Hostaway said that it has increased its revenues by more than 10 times since 2021 and is on the path to profitability and growth. Earlier this month, the company launched a ChatGPT-powered artificial intelligence tool. All of its property managers and channel manager clients will have the option to use the tool to manage listings and increase bookings, by perfecting listings.
This funding round is Hostaway’s largest fundraise, going beyond seed and pre-seed rounds — prior to this, the company’s funding total stood at $3.2 million and its last round was worth $1.9 million in November 2018.
Photo credit: The Hostaway founding team (L-R) Saber Kordestanchi, Marcus Rader and Mikko Nurminen. Source: Hostaway