HomeAway Mulls Venture Fund As It Hits A Milestone

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The vacation rental marketplace HomeAway is pondering a move into backing startup companies.

As it passes a recent milestone of breaking more than 1 million listings on its service, one of the first online marketplaces to challenge the hotel industry may begin making minority investments in companies that would add value to its service.

“There are lots of entrepreneurs in the travel space — and now in particular around the vacation rental space,” says Brian Sharples, HomeAway’s co-founder and chief executive. “We’re very actively looking at [investing]. Historically we have either bought companies outright or bought a joint position.”

Indeed, since it was launched in 2005, HomeAway has made roughly 20 acquisitions, according to Sharples. “Mostly what we do is we buy leading companies in other countries that we’re not in,” he says. “When you have a success in the U.S., entrepreneurs from all over the world start creating businesses that they hope you’re going to buy.”

HomeAway also makes technology acquisitions, like the recently announced deal for Glad To Have You. Now, however, the company is doing more to encourage an ecosystem of startups that can help make the rental process easier, Sharples says. HomeAway is actually on the cusp of making its first minority investment — in an undisclosed company that provides tax services for owners who rent on the HomeAway marketplace.

The move into investing around an ecosystem is just another indicator of how HomeAway has grown. “We’re the biggest in this business by far,” says Sharples. “We have more rooms than the top four hotel chains in the world.”

In some ways, the move to investments in startup companies is a sign of the company’s maturity and established position. In business for nearly a decade, Sharples says that some of the company’s employees may begin to look for their next venture, and he’d like to be able to support them.

 

Unlike the still-private Airbnb behemoth (last valued at $10 billion), HomeAway targets families with second homes – a smaller number of properties than Airbnb’s offering of potentially every spare room in the world.

For Sharples, whose company is currently valued in public markets at a not-insignificant $3.23 billion, HomeAway represents a different value proposition for customers. “When you rent from HomeAway, it’s something that’s been set up as a rental,” Sharples says. “People’s clothes aren’t sitting in the drawers. The toothpaste isn’t out in the bathroom.”