Travel and tourism are on the rise again for consumers and the business community. To underline this upswing, one of the startups developing software in this area has closed a large round of financing. Guesty, a platform that allows property managers to manage their business online, including on platforms like Airbnb and Vrbo, has raised $130 million.
Sources confirmed to TechCrunch that the post-money Series F values Guesty at around $900 million.
The company, based in New York and with roots in Israel, says its revenue has increased fivefold in the last three years and that it expects to become profitable this year. The company did not provide specific sales figures.
KKR is leading this round, with Apax Funds, Inovia, BDT & MSD Partners and Sixth Street also participating.
To put the funding into some context, in the wake of the coronavirus crisis, the global travel and tourism sector is experiencing a strong recovery and is expected to generate a record $11.1 trillion in revenue in 2024, according to the World Tourism and Travel Council . This is despite tourism in the US and China still reaching pre-pandemic levels.
For Guesty and its competitors, this upswing has translated into several rounds of nine-figure financing. Guesty most recently raised $170 million in Series E funding in August 2022, valuing it at $690 million. Guesty’s close competitor Hostaway raised $175 million last May, marking its first major funding round. Within a day of this news, GetYourGuide raised a whopping $194 million at a $2 billion valuation.
Mews, which like Guesty develops SaaS but for hoteliers, raised $110 million in March at a valuation of $1.2 billion. This trend is a stark reminder that investors are still willing to sign term sheets under the right circumstances.
“It’s definitely a tough market. Every round I raised, I always got 40 nos for every yes,” Amiad Soto, CEO of Guesty, told TechCrunch. Now that Guesty is “on the verge of becoming profitable this year,” he joked: “I Despite it I got 40 nos, but also a lot more yeses.”
Soto, who founded Guesty with his brother Koby (who is no longer with the company), plans to use the funds in a variety of areas.
First, the company wants to further expand its existing platform for existing customers. This deal already includes “hundreds of thousands” of properties today and will reinforce the one-stop-shop concept that many other B2B technology companies pursue today, Soto said. He refused several times to give me specific figures on the number of properties covered by the platform.
The platform offers the basics of listing and booking management software, analytics, accounting tools, the ability to manage multiple properties, and CRM capabilities. More recently, it has added advanced payment services and capital advances (built in-house, not white-labeled by third parties, according to Soto), loss protection services (diving into the insurance space), website building tools and price optimization services, all of which integrate with the dozens of interfaces across which a property manager might list a room or apartment for travelers to book.
Secondly, Guesty’s main focus has been on short-term rentals – properties that are typically booked for less than a month – but the company is now looking to expand into the medium-term space. This opens it up to more people who, for example, live in one place temporarily for a specific work assignment.
Third, Soto said Guesty wants to consider further acquisitions. The market may not look favorable for all startups at the moment, but this is less a comment on the strength of startups (talent and innovation) and more on the current state of venture capital. There are many very interesting companies that may be willing to consider takeover offers that offer less positive valuations.
Stephen Shanley, Partner and Head of Europe Tech Growth at KKR; Lauriane Requena, Director at KKR Tech Growth; and Dennis Kavelman, partner at Inovia Capital, all join the board with this round. “Guesty is a world-class operator and one of the clear leaders in the property management sector,” Shanley said in a statement. “There has been a significant shift towards the short-term rental market and this investment will help the company continue to meet this growing customer need.”