Canada / Finland: All-in-one vacation rental software and management system, Hostaway, has announced a $175 million capital raise.
The funding was led by PSG, a growth equity firm that partners with software and technology-enabled services companies to help accelerate their expansion.
The company aims to use the proceeds to propel its growth trajectory, expand globally, grow headcount, strengthen customer service, enhance onboarding processes, and pursue both organic and inorganic opportunities to expand market share.
Founded in 2015 by Marcus Räder, Saber Kordestanchi and Mikko Nurminen, Hostaway sets out to automate and simplify the process of property management, helping property managers scale and grow their businesses. The company claims to have increased its revenues by more than ten times since 2021 and achieved strong profitability alongside its growth profile.
Today, Hostaway customers collectively manage more than 100,000 properties in over 100 countries.
With more than 100 partners in its marketplace, Hostaway became the first property management and channel management software company to earn the highest partnership designations from the three leading online travel agencies [OTAs] – Airbnb, Vrbo and Booking.com – and it also currently has preferred relationships with Google, Expedia, Tripadvisor and Homes & Villas by Marriott Bonvoy.
Hostaway allows property managers to manage all key aspects of their vacation rental business, including property management, channel management, automation tools, analytics and reporting, communication and marketing.
The global opportunity in the vacation rental management software market is large and increasing with a total addressable market that is estimated to stand at $2 billion.
Domestic leisure and travel categories are continuing to rebound in Europe and North America, and small property owners are increasingly outsourcing to property managers and digitising their operations. In addition to its position in Europe and North America, Hostaway’s customer base is further enhanced by an expanding presence in Asia, the Middle East, South America and Oceania.
Marcus Rader, co-founder and CEO of Hostaway, said: “We are thrilled to partner with PSG, as we continue to elevate the vacation rental industry and unlock value for property managers beyond what had been thought possible. We have operated with incredible speed and efficiency, balancing growth with our current strong profitability, and this investment represents a significant milestone in our journey toward global market leadership.
“We’ve come a long way, but we are just getting started. The opportunities are endless,” he added.
Edward Hughes, managing director at PSG, said: “We are impressed with the quality of the Hostaway team, their vision and execution in building what is, in our view, a highly differentiated category leader with multiple levers of value creation. We believe the company has a significant opportunity to lead this industry, as it continues to scale its integrated platform, expand globally and help its customers meet the growing demand in the short-term rental market.
“We look forward to partnering with Hostaway in this new exciting chapter,” he added.
Vista Point Advisors, a San Francisco-based boutique investment bank, served as the exclusive financial adviser to Hostaway.
Prior to this investment, Hostaway had raised approximately $3.2 million, including a seed round in late 2018, according to Crunchbase.