It's a merger of equals, for strength, scale and growth.
Two UK-based short-term accommodation brands are joining forces: UnderTheDoorMat Group and Veeve are merging in a share exchange.
The combined entity will bring together all sub brands, including property-management solution “Hospiria” and “TrustedStays,” which links short-term rental companies with the global distribution system Amadeus and the corporate travel market.
The company, headquartered in London, will operate across the UK, Europe, Middle East, North America, and Asia, with core operations in London and Paris.
“It really was an opportunity for a strategic partnership,” said Merilee Karr, CEO of UnderTheDoormat group. “Bringing all of our brands together, we have a huge amount of overlap. And it’s really about the merger of growth, and about us being able to continue to scale up the businesses from a position of strength.”
Founded in 2011 as Vive Unique, Veeve began as home-sharing service for London homeowners. Founded by Jonny Morris and Claire Whisker, the company officially opened in April 2012 with a portfolio of 200 private home rentals. The momentum continued as Veeve raised £3.5 million ($4.3 million) from Smedvig Capital in May 2014 and again in November 2015, bringing the total funding to £7 million ($8.7 million).
For this merger, Smedvig Capital led the funding with £4 million ($5 million) in combined investment from Second Century Ventures and other UnderTheDoormat Group investors.
Karr will lead the combined group as CEO, and Veeve’s Chairman Carl Michel and Smedvig Partner Cristian Young will join the board. David Hosking, Veeve’s current CEO, will retire and advise the group.
Karr noted that UnderTheDoormat Group will be the holding company while Veeve will be the consumer-facing brand.
Focus on the Future
Karr said the first order of business is preparing for the Paris Olympics next year and to get ahead of the curve in terms of its consumer short-term rental business.
Second, the company will look at growing its B2B business, underpinning more institutional real estate deals and expanding the tech brand Hospiria internationally. Additionally, Karr noted the company is working on a pilot program with a large property portal in the UK, which will open up new channels to market for short-term rental companies in the UK.
Merger of Equals
The deal will see no reduction in headcount. “We are not expecting to make major layoffs as a result of it but we will be taking a look at what both businesses do well and how we can learn from each other and improve and grow,” Karr said. “We are really looking to deploy the resources to support the growth.”
Like Morgann Lesne of Cambon Partners noted in a Skift interview last week, this is just the beginning of such mergers and acquisitions. A hyper-fragmented market in Europe is ripe for consolidation. And Karr agreed.
“Now that the bust-boom and everything related to Covid is unwinding, we will start to see how the industry matures,” Karr said. “Professionalism is going to be incredibly important, brands are going to be increasingly important, and scale is going to be important. I think that the industry is going to see much more consolidation. I would be very surprised if this is the only deal that we’re going to be announcing over the coming months.”
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Photo credit: Tower Bridge in London, England. Charles Postiaux/Unsplash Charles Postiaux / Unsplash