Wander secures $100m debt facility to accelerate portfolio growth

US: Austin-based smart home rental platform Wander has announced that it has secured $100 million in a debt facility from Credit Suisse as it plots a rapid acceleration of its portfolio growth across the United States.

It follows last month’s launch of what Wander calls “the industry’s first vacation home rental real estate investment trust [REIT]”, known as Atlas, and the startup’s $20 million Series A funding round in February.

Atlas is designed to turn its customers into partial property owners and investors by providing them with an opportunity to invest in the same homes they book.

Wander says that it will leverage Atlas to expand its network of smart vacation homes from coast-to-coast so it can grow its number of rentals by more than 100 per cent by early 2023, positioning Wander properties within a three-hour drive of 80 per cent of the US population.

With Atlas, both retail and institutional investors will be able to tap into Wander’s real estate portfolio in an accessible and scalable way.

Wander was founded in May 2021 with the goal to build the travel experience of the future that reflects new consumer behaviours where people increasingly blend travel, family time, work and play in one experience. The company is aiming to stand out in the travel services space by vertically integrating and owning 100 per cent of the homes on the platform, in order to provide uncompromising high quality, smart technology, and a wide range of unique, inspiring locations for every guest experience.

Properties in Wander’s portfolio are transferred to Atlas when they become available for paying guests, however Wander retains the right to operate and maintain the units even if they go under the Atlas umbrella. As part of Wander’s business model, described as an “index” of vacation rentals by CEO John Andrew Entwistle, profits are distributed to investors on a monthly basis or once the property is sold and profits are made.

Entwistle told Forbes: “You have so much exposure to a single asset in a single location. We want to have diversity in terms of regions and locations and trends and what people want to do, to really stabilise the portfolio.”

Kyle Tibbitts, chief marketing officer at Wander, said: “We’re seeing a tectonic shift in consumer behavior where travelers are demanding the quality of a luxury hotel paired with the comfort and space of a vacation home. This foundational financial infrastructure unlocks a powerful flywheel where invested capital allows us to launch new markets, new markets open up access to new customers and those customers can invest back into our ecosystem to drive more growth.”

Currently operating 13 properties in locations such as Vail, Tahoe, Joshua Tree, Asheville, Hudson Valley and coastal properties in CaliforniaFloridaOregon and South Carolina [some of which will be part of Atlas], Wander is planning to more than double its number of rental properties by early 2023, expanding to new high-demand beachfront, mountain, lakefront and desert destinations. The company specifically caters to digital nomads by installing high-speed wifi, state-of-the-art desk setups, home gyms and a Tesla in the garage for a guest’s personal use during their stay.

Prior to the credit facility, Wander had raised more than $30 million in funding from QED Investors, Redpoint Ventures, Authentic Ventures, Susa Ventures, Kevin Durant, Packy McCormick, Sahil Bloom and Todd & Rahul’s Angel Fund, as well as other angel investors and operators.