7 months ago
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Travel and tourism are very much back on the map for consumers and the business world. Now, to underscore that surge, one of the startups building software in the space has closed a big round of funding. Guesty — which has built a platform for accommodation managers to manage all aspects of their business on platforms like Airbnb, Vrbo and directly to travellers — has raised $130 million.
The company, based out of New York with roots in Israel, says it expects to turn profitable this year and has grown revenues 5x in the last three years (without specifying actual revenue figures). Sources confirmed to TechCrunch that the Series F values Guesty at around $900 million post-money.
KKR is leading this round, with Apax Funds, BDT & MSD Partners and Sixth Street also participating.
To put the funding into some context: post-Covid, the tourism and travel sector has been on a strong rebound, with the World Tourism and Travel Council estimating that in 2024, globally it will generate a record-breaking $11.1 trillion in sales, despite the U.S. and China still not back to pre-pandemic levels of strength.
The upswing has been in progress for the last couple of years, and it’s played out with a number of nine-figure funding rounds not just for Guesty, but its competitors and startups in the space. Guesty’s last round, in August 2022, was a Series E of $170 million that valued it at $690 million. Guesty’s close competitor Hostaway raised $175 million in May last year (its first ever big funding round). Within a day of that news, GetYourGuide raised a monster $194 million at a $2 billion valuation.
And Mews, which like Guesty builds SaaS but for hoteliers, raised $110 million at a $1.2 billion valuation last month (March 2024). It is a reminder that investors are still willing to sign term sheets in the right circumstances.
“It’s definitely tough market. In every round I’ve raised, I would always get 40 no’s for every yes,” Amiad Soto, Guesty’s CEO, said in an interview. Now, with Guesty “closing in on becoming profitable this year,” he joked that “I still got 40 no’s, but also a lot more yes’s.”
Soto, who co-founded Guesty with his brother Koby (who is no longer with the company), plans to deploy the funding across a few different areas.
First of all, Guesty wants to continue expanding its existing platform for current customers. That business today already covers “hundreds of thousands” of properties, he said — he declined several times to give me a more specific figure — and it will double down on the one-stop-shop concept that a lot of other B2B tech companies are pursuing today.
The platform covers the basics of listing and booking management software, analytics, accounting tools, the ability to manage multiple properties, and CRM features. More recently, it’s added enhanced payment services and capital advances (built in-house not white labelled from third parties, Soto said), damage protection services (that is dipping into the area of insurance), website building tools, and price optimization services that all integrate with the dozens of interfaces where a property manager might list a room or home for travellers to book.
Second of all, while the main focus to date for Guesty has been short-term lets — booked typically for less than a month — now the company wants to expand into the medium-term space. This will open it up to more people who might be living temporarily in a location for a specific work assignment, for example.
Third of all, Soto said that Guesty wants to consider more acquisitions. This is because the market may not be looking favorably on all startups right now, but this is less a comment the strength of startups (talent and innovations) as it is on the state of venture right now. This basically means there are a lot of potentially very interesting companies out there that might be ready to entertain getting acquired at less bullish valuations.
Stephen Shanley, partner and head of Europe Tech Growth at KKR, along with Lauriane Requena, a principal at KKR Tech Growth, and Dennis Kavelman, Inovia Capital partner, are all joining the board with this round. “Guesty is a best-in-class operator and one of the clear leaders in the property management sector,” said Shanley in a statement. “There has been a significant shift towards the short- term rental market and this investment will support the company as it continues to meet that growing customer need.”
