Travel and tourism is once again in the spotlight for consumers and the business community. And now, underscoring that surge, one of the startups building software in this space has closed a major funding round. Guesty, a platform that allows lodging managers to manage their businesses online, including platforms like Airbnb and his Vrbo, has raised $130 million.
Sources confirmed to TechCrunch that the Series F values Guesty at about $900 million post-money.
The New York-based company, which has Israeli roots, said its revenue has increased fivefold over the past three years and it expects to be profitable this year. The company has not disclosed the actual amount of revenue.
KKR led the round, with participation from Apax Funds, Inovia, BDT & MSD Partners, and Sixth Street.
To put the funding in some context, the global travel and tourism sector has rebounded strongly since COVID-19 and is expected to reach a record $11.1 trillion in 2024, according to the World Tourism Council. Sales are expected to increase. This is despite the fact that tourism in the United States and China is still catching up to pre-pandemic levels.
For Guesty and its competitors, this turnaround unfolded in the form of a number of nine-figure funding rounds. Guesty last raised $170 million in Series E, valuing it at $690 million in August 2022. Guesty competitor Hostaway raised $175 million last May, its first major funding round. Within a day of that news, GetYourGuide raised a whopping $194 million at his $2 billion valuation.
Mews, which like Guesty builds SaaS for hoteliers, raised $110 million in March at a valuation of $1.2 billion. This trend is a strong reminder that investors are still willing to sign term sheets in the right circumstances.
“It's definitely a tough market. Every round I've raised, there's always been 40 no's for every yes,” Guesty CEO Amiad Soto told TechCrunch. Currently, Guesty is “close to being profitable this year,” and he joked, “There are still 40 no's, but more yes's.”
Mr. Soto co-founded Guesty with his brother Coby (now retired) and plans to deploy the capital into several different areas.
First and foremost, the company wants to continue expanding its existing platform for its current customers. Soto said the business already covers “hundreds of thousands” of properties and will further strengthen the one-stop-shop concept that many other B2B technology companies are pursuing today. . He repeatedly declined to give me more specific numbers on how many properties the platform covers.
The platform provides the basics of listing and reservation management software, analytics, accounting tools, the ability to manage multiple properties, and CRM functionality. More recently, it has expanded its payment services and capital advances (which Soto said were built in-house rather than white-labeled from a third party), loss protection services (entering the insurance space), and its website. Added construction tools and price optimization services. Integrates with dozens of interfaces that allow property managers to list rooms and homes that travelers can book.
Second, while Guesty has traditionally focused on short-term rentals (properties typically booked for less than a month), the company is now hoping to expand into the medium-term space. This makes it available to more people who may be living there temporarily for a specific job, for example.
Third, Soto said Guesty would like to consider further acquisitions. The market may not be in a favorable situation for all startups right now, but that's less a comment on the strength of startups (talent and innovation) than it is a comment on the current state of venture capital. There are a number of very interesting companies that may be ready to respond to takeover offers that offer less bullish valuations.
Stephen Shanley, Partner and Head of European Technology Growth at KKR. He is Lauriane Requena, a principal at KKR Tech Growth. and Dennis Kavelman, a partner at Inovia Capital, all join the board in this round. “Guestity is a best-in-class operator and one of the clear leaders in the property management sector,” Shanley said in a statement. “There are significant changes to the short-term rental market, and this investment will help the company continue to meet the growing needs of its customers.”