The Austin, Texas-based HomeAway was founded back in 2005. The company raised a total of almost $505 million in five funding rounds before it went public in 2011.
Expedia will buy each outstanding HomeAway share of common stock for $10.15 in cash and 0.2065 of a share of Expedia common stock. The transaction will likely close in the first quarter of 2016.
HomeAway says it currently features more than a million paid vacation rental home listings in 190 countries on its site. The company also owns a portfolio of other rental sites, including VRBO.com and VacationRental.com in the U.S., as well as similar sites in the UK, Germany, France, Spain, Brazil, Australia and New Zealand. It also operates BedandBreakfast.com.
Today’s announcement puts Expedia, which owns sites like Hotels.com, Hotwire.com, Travelocity, Orbitz and Venera, in direct competition with Airbnb. Given Airbnb’s rapid growth, Expedia probably looked at building its own competing service but decided to use its war chest to acquire HomeAway instead.
“We have long had our eyes on the fast growing ~$100 billion alternative accommodations space and have been building on our partnership with HomeAway, a global leader in vacation rentals, for two years,” said Dara Khosrowshahi, the CEO of Expedia in today’s announcement. “Bringing HomeAway into the Expedia, Inc. family and adding its leading brands to our portfolio of the most trusted brands in travel is a logical next step.”