Holidu pockets $102M to keep growing its vacation rentals business in Europe

Munich-based software and services vacation rental startup, Holidu, has topped up its coffers with an oversubscribed €104 million (~$102 million) Series E funding round of equity and debt, led by existing investor 83North, after seeing its year-over-year revenue grow 100% in 2021.

The round saw a mix of other existing and new investors chipping in, including in the latter camp Northzone, HV Capital, Vintage Investment Partners and Commonfund Capital, and with (in the former) Prime Ventures, EQT Ventures, coparion, Senovo, Lios Ventures and Possible Ventures.

The €100 million raise also includes a chunk of venture debt — €25 million — that’s been put up by Claret Capital and Silicon Valley Bank. So the equity component of the Series E comprises €75 million.

While travel startups were hit hard by coronavirus lockdowns in the early wave of the pandemic, vacation rentals picked up fairly quickly as lockdowns eased later on in 2020 and 2021, and as platforms retooled to cater to reconfigured demand from travelers opting for more domestic breaks over going farther afield, for example.

Holiday homes were also better positioned than other travel options like hotels (or, er, cruise ships) to offer attractive private spaces where people could feel safer about taking a break even as vaccine rollouts were still ramping up. Holidu and its investors are banking on that increased demand sticking around.

The German startup tells TechCrunch travel and booking patterns have now largely returned to resembling the pre-pandemic picture from 2019, with a rise in international (vs. domestic) travel bookings. It also says holiday makers are feeling more comfortable about planning ahead again and back to booking around a month in advance versus the shorter timeframes people switched to during the height of COVID-19 uncertainty.

Post-pandemic (or, well, post-the-peak-of-the-crisis), demand for travel has rebounded fiercely as plenty of people hankered to finally get away again — which is reflected in the larger growth Holidu booked in 2021 (100%) vs. 2020 (when it was up around 50% y-o-y).

It says its vacation rentals metasearch engine, which compares listings across over 1,500 websites, reached more than 110 million visitors in the last 12 months. And — with fresh funding in its back pocket — Holidu is gearing up to further press on the growth gas by expanding its rollout of local office locations to support its market outreach efforts.

A second strand of its business is aimed at increasing supply via a software and services play, called Bookiply, targeting vacation rental hosts — helping them get their properties online by streamlining administration and supporting them to grow bookings.

The startup says the unit grew 13x between 2019 and 2022. In 2021 specifically, Bookiply’s revenue growth was 4.4x — and in the first nine months of 2022 its revenues have grown 3.3x. While the number of managed Bookiply homes has stacked up from 5,000 three years ago to nearly 20,000 now, it sees plenty of room to keep building that out.

“As a group we are growing at a high double-digit rate,” CEO and co-founder, Johannes Siebers, told TechCrunch.

“We see that our company delivers true value to hosts and guests, which is reflected in our very strong host retention and guest satisfaction. We will now scale our region-by-region approach into Europe’s large and attractive hosting market. This financing round is a great vote of confidence in the current environment. We are on the path to build a big company,” he added in a statement.

Holidu’s growth has been fueled by a number of acquisitions in key markets — with Holidu buying a veteran holiday home portal Spain-Holiday.com last year and picking up a couple of vacation rental services firms focused on German speaking markets (Lohospo and my.IRS) earlier this year to boost its services offering in the DACH markets (Germany, Austria, Switzerland).

“With the Series E raise, we are open to further acquisitions on the supply side,” Siebers also told us.

While the startup reported reaching profitability with its search business back in 2020 he says it remains focused on scaling — saying its too early to consider an IPO at this stage (NB: Holidu was founded back in 2014).

“With close to 20,000 Bookiply properties we consider it still ‘early days’ for us,” he said. “The global market is very large and we are fully focused on expanding our property base in new and existing areas and on working on our products for hosts and guests.”

Discussing trends it’s seen accelerating over the last three years, he flags the adoption of vacation rentals as a big one — pointing to a Deloitte study that found that 43% of travelers during 2021 booked a vacation rental for the first time and reported that three-quarters of respondents planned to continue to stay in vacation rentals for at least half their trips in the future.

Flexible work patterns established as a result of the pandemic are also resulting in travel seasons broadening, per Siebers, who says they’ve seen stronger booking demand for “shoulder seasons” outside of core school holidays.

A final (contradictory) trend he flags is demand for “sustainable” vacation rental homes, with accommodations that are marked by Holidu with an “Eco” label achieving a 12% higher click through rate and a 29% higher conversion rate than properties that do not possess such a label — suggesting travelers are looking for ways to offset any environmental guilt they may feel about jetting off by taking steps to reduce the overall emissions load of their holiday.

One growth trend Siebers does not mention is rising rents for long-term tenants looking for accommodation they can actually live in.

Housing costs are being exacerbated by the cost-of-living crisis that’s driving inflation and interest rates, atop a long term undersupply of affordable housing stock across many regions, but vacation rentals complicate the picture by further reducing accommodation units available for long-term tenants to rent.

This trend is fueling a fresh wave of calls for regulators to clamp down on short-term lets that could encourage more towns and cities to adopt measures to restrict vacation rentals — especially in cities and regions that are also popular tourist destinations. So rising housing costs is one pressure point that could throw up some harder roadblocks to future growth of the vacation rentals sector in the coming years.

This report was updated with a correction to the total amount raised after Holidu provided us with an incorrect (rounded down) figure for the amount of euros raised initially. They told us they had raised €100 million — but subsequently said the actual amount is €104 million — so we have amended the figures. 

We also made a second correction — also as a result of being sent incorrect information by Holidu. They originally made mention of a McKinsey study which they said had indicated that 43% of travelers during 2021 booked a vacation rental for the first time and also found that three-quarters of respondents planned to continue to stay in vacation rentals for at least half their trips in the future — however this was actually a Deloitte study so we corrected the reference in our report. You can find the Deloitte study here, with the cited ‘43%’ stat on page 5 (in a section of the report entitled ‘Rental surge to continue’)