Some analysts are even projecting the short-term rentals market to hit $169.7 billion by 2019 and $193.9 billion by 2021 due to changes in the travel industry, like the Chinese traveling boom, the “millennial traveler” and the cost reduction of air travel.
With all that money getting thrown around, startups are forming to supplement marketplaces like Airbnb. Companies like Guesty, which just raised $3 million, are building tech to help property managers optimize their listings.
Buran VC led the Series A round, and was joined by Magma Venture Partners (an early Waze investor) and AltaIR Capital. The company is using the money to continue scaling and to bring in an executive layer of engineering, marketing, finance and customer success VPs.
The Tel Aviv-based startup, which graduated from Y Combinator in 2014, was co-founded by twin brothers Amiad and Koby Soto after they experienced the hassle of trying to operate their own rentals on Airbnb and OTAs, and wishing there was software to seamlessly cross-manage different bookings.
At launch, Guesty started as an on-the-ground management company, but it pivoted twice to become an online management company, and today it focuses on people with a portfolio of properties they want to list as short-term rentals.
So what does Guesty actually do? The goal is to automate mundane daily tasks of property managers like dispatching cleaning services and managing check-ins. The product, an end-to-end CRM software, integrates with rental platforms like Airbnb and HomeAway to that end.
The dashboard lets property management companies sync operations across different booking platforms, manage reservation check-ins and check-outs and adjust pricing, and offers a unified inbox to communicate with staff, team members and guests. Meanwhile, a multi-calendar tool helps managers control the availability and pricing of all the listings they manage, filtering by city, tags, dates and prices.
How are they making money? Soto tells me that Guesty became profitable in 2016, and that the service charges property management companies differently based on their needs. Pricing tiers are determined by variants like analytics and payment processing. Half the company’s revenue is coming from businesses in the U.S., and half is coming from Europe and Asia.
Because it isn’t possible to automate the entire short-term rentals process, Guesty, which currently employs 70 people, is also using some of its new funding to hire about 35 trained representatives to reply to guest inquiries.
Eventually, says Soto, the company has its sights set on other verticals, like hospitality management, and sees itself as a platform for improving assets in general. For now, it’s focusing on these initial areas where it’s seeing success.