Travel and tourism is back on the map for consumers and the business community. Now, to highlight that push, one of the startups creating software in the space has closed a major funding round. Guesty – which built a platform for accommodation managers to manage all aspects of their business on platforms like Airbnb, Vrbo and directly from travelers – has raised $130 million.
The company, based in New York with roots in Israel, says it expects to become profitable this year and has grown its revenue 5x over the past three years (without specifying actual revenue figures ). Sources confirmed to TechCrunch that the Series F values Guesty at around $900 million after money.
KKR is leading this round, with participation from Apax Funds, BDT & MSD Partners and Sixth Street.
To put funding in context: post-Covid, the tourism and travel sector has seen a strong rebound, with the World Travel and Tourism Council estimating that by 2024 it will globally generate revenue record $11.1 trillion, despite the United States and China still not returning to pre-pandemic strength levels.
The recovery has been underway for a few years and has resulted in a number of nine-figure funding rounds, not only for Guesty, but also for its competitors and startups in the sector. Guesty’s last funding round, in August 2022, was a $170 million Series E that valued it at $690 million. Guesty’s close competitor Hostaway raised $175 million in May last year (its first-ever major funding round). A day after this news, GetYourGuide raised a monstrous $194 million at a valuation of $2 billion.
And Mews, which, like Guesty, builds SaaS but for hoteliers, raised $110 million at a valuation of $1.2 billion last month (March 2024). This is a reminder that investors are always willing to sign term lists in the right circumstances.
“It’s a really tough market. Every round I raised, I always got 40 no’s for every yes,” Guesty CEO Amiad Soto said in an interview. Now that Guesty “is poised to become profitable this year,” he joked, “I always I got 40 no’s, but also a lot more yes’s.
Soto, who co-founded Guesty with his brother Koby (who is no longer with the company), plans to deploy the funding in several different areas.
First, Guesty wants to continue expanding its existing platform for current customers. Today, this activity already covers “hundreds of thousands” of properties, he said – he repeatedly refused to give me a more precise figure – and it will double the one-stop-shop concept used by many other B2B technology companies. continue today.
The platform covers the basics of listing and reservation management software, analytics, accounting tools, the ability to manage multiple properties, and CRM features. More recently, it has added enhanced payment services and capital advances (built in-house and not white-labeled by third parties, Soto said), damage protection services (which delve into the realm of insurance), website building tools, and pricing optimization services that all integrate with the dozens of interfaces where a property manager can list a room or house that travelers can book.
Second, although Guesty’s main focus until now has been short-term rentals (usually booked for less than a month), the company now wants to expand into the medium-term space. This will open it up to more people who might temporarily live in a location for a specific work assignment, for example.
Third, Soto said Guesty wants to consider more acquisitions. Indeed, the market may not be favorable to all startups at the moment, but this is less a comment on the strength of startups (talent and innovations) than on the current state of the sector. This essentially means that there are many potentially very attractive companies that might be willing to consider acquisition at less bullish valuations.
Stephen Shanley, Partner and Head of Europe Tech Growth at KKR, along with Lauriane Requena, Director of KKR Tech Growth, and Dennis Kavelman, Partner at Inovia Capital, all join the board with this round. “Guesty is a best-in-class operator and one of the clear leaders in the property management industry,” Shanley said in a statement. “There has been a significant shift towards the short-term rental market and this investment will support the business as it continues to meet the growing needs of its customers.”
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