Part a series on startups in the Vacation Rental space.
|Feb 21, 2018||Public post|
In addition to publishing a series of interviews with startup founders in the apartment rental space, we’re working on a similiar series of interviews with founders and investors in the vacation rental space.
According to AngelList, there are 423 startups in the vacation rental space, with an average valuation of USD 5m.
Below is an interview with Caroline Shin, CEO and co-founder of Vacatia, a San Francisco-based timeshare rental and resale marketplace. Vacatia has raised a total of USD 15.9m to date. In the interview, Caroline Shin talks about the anticipated size of the company’s series B round and what sets Vacatia apart from others in the vacation rental space.
How many employees does the company have?
Vacatia has a team of 20, primarily at our headquarters in San Francisco and Guest Care office in Orlando. I’ve had a long, fun career in travel as the first lead architect/product head at Hotwire, head of CRM at Starwood, and head of ops at Sentient Jet, before co-founding Vacatia. Our CMO was the first VP of ecommerce at FedEx, first GM of Apple’s online store, and the first CMO at StubHub. We’ve built the Vacatia team largely through our networks.
And when was the company founded?
Vacatia was founded in 2013 to disrupt the forty-year old, $35 billion timeshare industry by changing how its family resort lodging is marketed, sold and distributed, to resonate with the way current customers want to shop today.
Airbnb, HomeAway and others have shown that there is real demand for spacious accommodations at great values as an alternative to traditional hotel rooms. However, many customers are still shying away from vacation rentals because they want the comfort and peace-of-mind that comes with hotel services and amenities.
The timeshare product, with both the space of a home and services of a hotel, is the ideal accommodation, especially for vacationing families. Traditionally, timeshares were only accessible by purchasing a fractional real-estate ownership. Vacatia is now surfacing this high value inventory for online rentals to the broader $150 billion family travel market.
What sets Vacatia apart from others in the vacation rental space?
Vacatia only offers “Resort Residences”, which is what we call timeshares, along with fractionals and wholly-owned condos in professionally managed resorts. We do not offer hotel rooms or private home rentals.
Most families have no idea this type of inventory exists, or is available for rental. When they rent with us, they are happy not to be forced to compromise between space (vacation rental) and service (hotels). And they find family-friendly content and features useful to their travel planning, such as our complimentary 48-hour On-Hold, or financing options like our FlexPay split billing program.
In addition to rentals, we provide liquidity to ten million timeshare owners with our resale marketplace, currently endorsed by Disney Vacation Club and Royal Resorts, with more brand endorsements to be added this year.
We are now in the process of working with timeshare developers to support their primary sales efforts by leveraging the technology we’ve already built to transact resales. Imagine you rent a Resort Residence on Vacatia for your next family vacation. Instead of cramped, adjoining hotel rooms, you enjoyed having three separate bedrooms for the entire family with a large living room, fully-equipped kitchen and fun resort amenities. Your family loved the experience so much, you opt-in to learn more about the benefits of ownership, online on your own time, instead of going through a timeshare sales presentation. You can chat with a sales specialist, compare various product options and even make an offer right on the website. Once your offer is accepted, Vacatia’s licensed customer service team will work with you to complete the closing process. And in a few years, you can elect to rent or sell your timeshare on Vacatia if you find that your travel requirements have changed.
What geographies and/or niches does Vacatia serve?
Vacatia currently works with 650+ handpicked resorts in 29 top leisure destinations across North America. We plan to expand to over 9,000 resorts worldwide. Vacatia is 100% focused on super-serving the family travel market.
Who do you see as competitors in the space?
Families can of course choose any accommodation type, so any hotel or vacation rental company is generally a competitor. We differentiate our experience by focusing solely on families and friends traveling together and catering to their unique travel needs.
As for sales, there are brokers who operate mostly offline along with Craigslist, eBay, and other ad listing websites. Unlike these sites, we are endorsed directly by timeshare companies who have embraced us as a friendly disruptor who can accelerate their technology adoption to broaden their own audience and lower their high sales and marketing cost. It’s been an honor for me to be named to the board of American Resort Development Association, and for Vacatia to win the prestigious “Ace Innovator Award for Industry Partner”.
According to Crunchbase, Vacatia has raised a total of USD 15.9m, and the last round was a USD 2.1m second tranche of the series A round in which closed in September 2016. Is that accurate?
Yes. After much consideration, we expanded our Series A when Disney asked us (earlier than expected) to manage resales for their timeshare owners.
There’s been some talk amongst VCs that while total amount of venture capital investment is up over the past couple years, early stage investing has become harder to secure. What’s been your experience as you’ve talked to prospective investors? Have the milestones for investment changed?
It’s a numbers game as investors have no lack of promising companies to consider. We have been very fortunate to have smart money behind us. Javelin Venture Partners here in SF led our Series A, and our initial investor/advisors read like a “who’s who” of the resort and travel industries. We are operating at the intersection of technology, travel and real estate, so for us it’s about finding the right investor who can add value as we scale our business and serve as the catalyst for the next evolution of the resort industry.
Have conversations for a series B round begun and how likely is it that Vacatia could close a round over the next year?
Yes, we are currently in fund raising mode, and I hope the answer is very likely!
Any thoughts on how much capital you would look to raise?
Can you comment on revenue figures (even a broad range) and/or revenue projections moving forward?
In the home ownership segment, there’s some interesting innovation recently around partial equity ownership by startups. Are there innovations or disruptions on the horizon that you think can affect the vacation rental space?
Lines are blurring on who is the homeowner, property manager and transaction platform. It will be interesting to see if vacation rental companies will grow through vertical vs. horizontal integration.
Do you see deal making in the space picking up over the next 12-24 months? What factors do you see contributing to this outlook?
We don’t expect deals to slow down considering how much fragmentation exists in the vacation rental industry.
Any figures on the company's growth that you would care to share (e.g. X number of rentals, X number of users, etc...)?
Not yet, but we’ll make sure we call you when we’re ready to announce them!