Most people just guess how to price their vacation rental based on minimal research, or take platforms like Airbnb’s suggestions that just want to maximize their own revenue. Beyond Pricing aligns itself with home owners, taking 1% of bookings to optimize their rates on a daily basis.
As you might expect of a startup that costs 1% to often earn people 10% to 40% more on anything, it blew up. In the 4.5 years since I covered its $1.5 million seed round, it has grown from 26 to 7,000 cities and from four to 60 employees. Beyond Pricing now handles more than 150,000 listings. It stealthily raised $2 million more in 2016. But today it announces a mammoth $42.5 million Series A funding round led by Bessemer Venture Partners.
“We skipped a lot of intermediary funding,” Beyond Pricing CEO Ian McHenry tells me with a chuckle. “We wanted to have a capital partner that could help us take a few more risks and build out a bunch of new products and go after Europe in a big way since it’s over half of the whole market.” That cash could grow the startup’s total priced bookings past the $2 billion it’s handled so far, dive deeper into working with professional property managers and even see it build algorithms for today’s unique hotels with tons of different room types.
Here’s how Beyond Pricing works. You connect your Airbnb and other vacation rental platforms or your own rental calendar. Beyond Pricing scours all the platforms for what similar homes charge, their vacancy rates, what hotels are charging, historic and current demand fluctuations, airline info, weather and more. You can look at charts of prices in your neighborhood or nearby hotels, and adjust the base and minimum rates. Then Beyond Pricing automatically applies its daily rates to your listing or lets you export them to start earning the most possible.
It’s basically giving to ordinary people and property managers the technology big hotel chains use, or an Uber Surge Price algorithm for Airbnbs. Instead of haphazardly choosing a high-season and low-season rate or maybe an upcharge on weekends, Beyond Pricing does what no human would or could accurately: provide 365 uniquely optimized prices. While the platforms just want you renting your place out as much as possible to boost their take, even if it means more work and upkeep for you, Beyond Pricing wants you to earn as much as possible to grow its 1% cut.
But next, McHenry wants to go bigger. Modern hotels don’t just have “King” or “Two Twins” rooms. They offer a wide range of suites, views, decors and amenities. Hotel pricing systems aren’t built for that, but Beyond Pricing is because it’s accustomed to assessing quirky individual homes. One area he’s not keen on: getting back into the risk of managing property. Beyond Pricing was once Beyond Stays, but saw a leaner business in pricing technology instead of cleaning bed sheets.
The biggest threat? That Airbnb will completely conquer the vacation rental market, depriving Beyond Pricing of data and the ability to play platforms off each other. But McHenry knows it’s too lucrative of a market for VRBO, HomeAway and others to back down.
For now, McHenry’s having a lot of fun with his spreadsheets. A former investment banker focused on airlines and an avid traveler, he wanted to see more awesome properties for rent and more people earning extra income or a living off of them. “I’m a huge data nerd. I love looking at numbers and trying to optimize things. If I had my druthers I’d end up just playing with the algorithms all day.”