Holidu pockets $102M to keep growing its vacation rentals business in Europe • TechCrunch

Munich-based software and services vacation rental startup Holidu has bolstered its coffers with an oversubscribed €104 million (~$102 million) Series E funding round of equity and debt, led by existing investor 83North will, after Annual sales increased by 100% in 2021.

The round saw a mix of other existing and new investors, including in the latter camp Northzone, HV Capital, Vintage Investment Partners and Commonfund Capital, and (in the former) Prime Ventures, EQT Ventures, coparion, Senovo, Lios Ventures and possible ventures.

The €100 million raise also includes a portion of venture debt – €25 million – raised by Claret Capital and Silicon Valley Bank. The equity component of Series E is therefore €75 million.

While travel startups were hit hard by coronavirus lockdowns in the early wave of the pandemic, vacation rentals recovered fairly quickly when lockdowns eased later in 2020 and 2021 and platforms were retooled to cater to reconfigured traveler demand to become who opted for more domestic breaks to go further afield, for example.

Vacation homes were also better positioned than other travel options like hotels (or, er, cruise ships) to offer attractive private spaces where people could feel safer while taking a break, even as vaccine adoption increased. And Holidu and its investors are banking on that rising demand.

The German startup tells TechCrunch that travel and booking patterns are now broadly resembling the pre-pandemic picture of 2019, with a surge in international (vs. domestic) travel bookings. It also said vacationers are more comfortable planning ahead again, booking about a month in advance, than in the shorter timeframes people have switched to during the height of COVID-19 uncertainty.

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Post-pandemic (or, well, post-crisis peak), travel demand has rebounded sharply as many people yearned to finally get away — reflected in the bigger growth Holidu has booked in 2021 (100%) compared to 2020 (when it was up about 50% year-on-year).

The holiday rental metasearch engine, which compares offers on over 1,500 websites, has received more than 110 million visitors in the last 12 months. And — with fresh funding in its pocket — Holidu is preparing to continue driving the growth gas by expanding the rollout of local office locations to support its market-targeting efforts.

A second line of business aims to increase supply via a software and service offering called Bookiply, which is aimed at vacation rental owners – helping them get their properties online by streamlining administration and helping them increase bookings.

The startup says the unit grew 13-fold between 2019 and 2022. Specifically, in 2021, Bookiply’s revenue growth was 4.4x — and in the first nine months of 2022, revenue is up 3.3x. While the number of Bookiply homes under management has grown from 5,000 three years ago to almost 20,000 now — it sees plenty of room to expand further.

“As a group, we’re growing at a high double-digit rate,” CEO and co-founder Johannes Siebers told TechCrunch.

“We see that our company offers real value to hosts and guests, which is reflected in our very strong host loyalty and guest satisfaction. We will now scale our regional approach to Europe’s large and attractive hosting market. This financing round is a great vote of confidence in the current environment. We are on our way to building a great company,” he added in a statement.

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Holidu’s growth has been fueled by a series of acquisitions in key markets – last year Holidu bought veteran vacation rental portal Spain-Holiday.com; and earlier this year to acquire some vacation rental service companies specializing in German-speaking markets (Lohospo and my.IRS) in order to expand its range of services in the DACH markets (Germany, Austria, Switzerland).

“With the Series E increase, we are open to further acquisitions on the supply side,” said Siebers.

While the startup reported having achieved profitability with its search business as early as 2020, it remains focused on scaling – saying it’s too early to consider an IPO at this point (NB: Holidu was founded back in 2014).

“With almost 20,000 Bookiply properties, we still consider it ‘early days’ for us,” he said. “The global market is very large and we are fully focused on growing our real estate base in new and existing areas and working on our host and guest products.”

Discussing trends that have accelerated over the past three years, he cites the adoption of vacation rentals as a big trend — pointing to a McKinsey study that found 43% of travelers will be renting a vacation rental for the first time in 2021 have booked and reported that three-quarters of respondents plan to continue to spend at least half of their trips in vacation rentals.

Flexible working patterns introduced as a result of the pandemic are also leading to an expansion in travel times, according to Siebers, who says she’s seen stronger booking demand for “off-seasons” outside of core school holidays.

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And as a final (contradictory) trend, he cites demand for “sustainable” vacation rentals, with properties that have an “Eco” label from Holidu earning a 12% higher click-through rate and a 29% higher conversion rate than properties that do don’t have such a label – suggesting that travelers are looking for ways to offset the environmental debt they may feel while jetting by taking steps to reduce the overall carbon footprint of their vacation.

One growth trend Siebers doesn’t mention is rising rents for long-term renters looking for an apartment they can actually live in.

Housing costs are being exacerbated by the cost-of-living crisis, which is driving inflation and interest rates, in addition to a long-term undersupply of affordable housing in many regions, but vacation rentals complicate the picture by further reducing the units available for long-term renters.

This trend is fueling a new wave of calls for regulators to ban short-term rentals, which could encourage more cities and towns to take action to restrict vacation rentals – particularly in cities and regions that are also popular tourist destinations. So rising housing costs are a pressure point that could pose some tougher barriers to future vacation rental sector growth in the years to come.

This report has been updated with a correction to the total amount collected after Holidu provided us with an incorrect (rounded down) number for the initial Euro amount collected. They told us they had raised €100m – but later they said the real amount is €104m – so we changed the numbers


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