Vacation rental start-up Vacasa secures $108 million Series D funding from existing investors Silver Lake, Riverwood Capital, and Level Equity. The latest round brings Vacasa’s total funding to $634.5 million. The company has not disclosed its latest valuation, but given the market dynamics, this latest round is likely below the $1-billion valuation it got in October 2019. The company raised $319 million in that round.
The new round of funding is expected to re-ignite its growth plans.
Pre-pandemic, Vacasa had internal challenges with the departure of co-founder and CEO Eric Breon in February and its CTO in January. Shortly after, its business was severely impacted by the coronavirus. In March, the company laid off employees, transition some to part-time work, and cut executive pay to preserve cash. At that time, Vacasa operated nearly 30,000 rentals and employed 6,000 worldwide and 400 at its headquarters.
CEO Matt Roberts acknowledged the “challenges” from Covid-19. He said in a statement, “As we begin to emerge from this global crisis with an infusion of capital, we are in a very strong financial position to capture consumer demand.”
As travelers look for more privacy and less crowded spaces, he expects they will opt for professionally managed vacation rentals over hotels. Vacasa is also addressing the higher standard of cleanliness that guests expect from all hospitality companies. Its Premium Clean program will follow or exceed CDC recommendations.
Vacasa is starting to see a pick up in daily reservations across more cities and a shorter booking window. According to the company, guest reservations in May were booked six times more than in April, including an increased interest in leisure travel. It is getting bookings from more U.S. cities, from 357 cities to 723 cities. Vacasa’s booking window is now comparable to its 2019 averages of around 39 days, down from 142 days in April.
Founded in 2009, Vacasa manages short term rentals for homeowners by providing booking, housekeeping, and customer service. It charges a commission of 20%-40%. Last year, Vacasa bought Wyndham Vacation Rentals, which had 9,000 units under management, for $156 million in cash and $10 million in equity.
The lead investor in this latest funding round, Silver Lake, is a savvy technology investor who has been bullish on the travel sector. In April, it invested $1 billion in debt and equity in Airbnb with Sixth Street Partners. Soon after, it invested $1.2 billion in Expedia Group with Apollo Global Management.