They say imitation is the sincerest form of flattery. But it doesn’t guarantee success, and today, an Airbnb clone learned that the hard way. Wimdu, a startup originally hatched out of the Rocket Internet startup factory in Berlin and modelled on the travel acomodation US startup Airbnb, announced that it would be shutting down at the end of 2018, citing “significant financial and business challenges.” 100 employees based across Berlin and Lisbon will be affected by the decision, it said.
“The stakeholders and management are working closely with the staff; primary goals are the fair treatment of employees affected by the closure and the management of forward bookings for our guests and hosts,” an announcement on the site reads. “All guests and hosts having 2018 bookings – with a check-in date occurring before or on the 31-December-2018 – will be carried out professionally and reliably. All guests with 2019 bookings – with a check-in date occurring after the 31-December-2018 – will be contacted separately to deal with their respective booking.”
The company has about 350,000 properties on its books and it is not clear whether Wimdu will work with any other organization to transfer those to another lettings platform. We have contacted the company to ask and will update as we learn more.
(It turns out that Airbnb also wanted to become the Airbnb of Europe, and it has largely succeeded.)
Things were different when Wimdu was founded in 2011, and Airbnb was much smaller. Armed with $90 million in funding (a large sum at the time, especially for a European startup), Wimdu and other clones competed aggressively against their US rival in building essentially the same business: a marketplace where people can offer and rent rooms and entire private homes for short-term visits, as an alternative to staying in a hotel.
Hatched out of the Rocket Internet startup factory — which has built international clones of other US businesses such as eBay, Groupon, Airbnb, Square, Amazon, sometimes selling some of these to the companies they cloned — Wimdu’s growth-hacking tactics were modelled on a template, one that was laid bare when Airbnb decided to fight back by writing to hosts to ward them off working with its imitators. In a letter, it laid out the tactics used by Wimdu and the rest:
A new type of scam has been brought to our attention: Airbnb clones posing as competition. We’ve discovered that these scam artists have a history of copying a website, aggressively poaching from their community, then attempting to sell the company back to the original.
After receiving emails from many of you who are upset with these tactics, it’s time to address this issue as a community. Hosts are reporting these issues about the clone sites so far:
- They falsely claim to be affiliated with Airbnb, or be the “international version” of Airbnb.
- They claim that they are part of Ebay and/or Groupon. We’ve confirmed that this is not the case.
- Their employees pretend to be Airbnb travelers in order to give you a sales pitch in your home.
- They are duplicating personal profiles, descriptions, and photos of your Airbnb listing without your permission.
It seems that early on, at least some of Wimdu’s effort to win territories worked. Airbnb at one point shuttered operations in Austria and consolidated that business in Germany. And in a couple of other cases Airbnb did buy its clones.
But if Airbnb seemed to buckle here and there, those were small battles, not the war. Longer term, it seems that Wimdu never raised more funding beyond the $90 million, and in 2016, it merged with another clone, 9Flats, amid reports of an attempted fire sale. That brought the total home inventory for the two companies to between 250,000 and 500,000.
This wasn’t enough to compete with Airbnb on scale, though: the larger company had 2 million properties on its platform at the time.
Then just weeks later Wimdu got acquired, by another European home lettings platform called Novasol, owned by Wyndham Worldwide.
Wyndham Worldwide then sold Novasol to PE firm Platinum Equity earlier this year for $1.3 billion, and yesterday Novasol announced a new CEO, so it looks like the Wimdu closure is part of how the new owner is now cleaning house and cutting out loss-making operations.
Airbnb has been on a growth tear these last several years: the company is now valued at upwards of $31 billion, is profitable on an Ebitda basis, and expects to ready to go public by June 2019 (it will have the pieces in place at that point but it hasn’t set a date for an IPO). Even with a dose of controversy, the Airbnb machine shows no sign of slowing down, and so the writing may have been on the wall for Wimdu and its owners.