US: PriceLabs, a provider of dynamic pricing and revenue management solutions for the short-term rental industry, has announced a $30 million minority growth investment from global alternative investment firm Summit Partners.
The funding round represents the first financing for the profitable business and will support PriceLabs’ continued commitment to building leading revenue management solutions and fuelling global team growth.
PriceLabs was founded in 2014 to bring sophisticated AI and analytical tools to owners and managers of vacation homes and short-term rentals.
The idea was born from co-founder Richie Khandelwal’s frustrations while managing personal rental property and the inability to efficiently adjust prices based on changes in demand. Teaming up with friends Anurag Verma and Sana Hassan, the group built a solution designed to address the similar challenges faced by the thousands of small business owners operating in the short-term rental market.
Today, PriceLabs powers over 150,000 listings in more than 100 countries. The company has been growing steadily since its founding, with an offering that has resonated with vacation rental businesses of all sizes, from single-property owners to large property managers.
More recently, PriceLabs won SaaSBoomi’s 2021 Bootstrapped Startup of the Year award after having grown nearly threefold in 2021.
Khandelwal said: “Pricing can be the single biggest growth lever when running any business, particularly in the hospitality space, where most businesses still use archaic methods and static pricing that can leave anywhere from ten to 40 per cent of revenue on the table. We purpose-built PriceLabs from the ground up to serve the needs of short-term rental operators, offering an easy-to-use and highly configurable solution that allows operators to combine our AI and algorithms with their own unique knowledge of the local market and property.”
PriceLabs’ automated dynamic pricing solution is designed to continuously analyse historical and forward-looking hyper-local data to sense changes in demand and recommend optimal daily pricing tailored to each property’s unique characteristics. The company’s comprehensive software provides users with data and tools to monitor and research local market conditions and adjust prices to suit the needs of the property and operations.
Prices update automatically through direct integrations with over 70 property management software solutions, helping property owners efficiently manage their operations and maximise the profitability of their listings.
Hassan said: “Our product democratises powerful tools that, historically, have only been available to large hospitality businesses. From an individual host seasonally renting their apartment in Paris to a multi-thousand unit vacation rental manager in Florida, we’ve built a solution that is easy to use, affordable, and integrates seamlessly with the software they’ve already adopted.”
Colin Mistele, managing director at Summit Partners, who has joined the PriceLabs board of directors, said: “Consumer preference has continued to shift in favour of alternative accommodations across every demographic, which has led to rapid growth in the short-term rental industry and over eight million unique listings on Airbnb and Vrbo alone. We see PriceLabs as ideally positioned to serve this growing market with an intuitive, easily customisable and comprehensive solution designed to deliver ROI to owners and managers almost immediately.
“We believe this deeply experienced team has a significant opportunity to capitalise on a substantial unpenetrated market as they continue to develop and launch innovative products,” added Mistele.
PriceLabs co-founder Anurag Verma said: “At PriceLabs, we believe every business in the accommodation space should have access to data-driven pricing and associated capabilities. We’ve been at the forefront of innovation – from building a pricing solution that can be used worldwide to building an industry-first minimum stay recommendation engine.
“With the support and growth-oriented resources that Summit offers, we are excited to continue our mission of delivering innovation to the short-term rental market and accelerate our global hiring,” he added.