The travel and tourism sectors are on track for a full recovery, returning to pre-pandemic levels, according to the UN. Reflecting this resurgence, Hostaway, a vacation rental software startup, has secured $365 million in funding at a $925 million valuation to accelerate its growth.
Hostaway provides software for property managers to streamline vacation rental operations, enabling users to manage listings, bookings, and guest communications across platforms like Airbnb and VRBO. The platform also features a marketplace of approximately 200 related services, from smart locks to insurance.
The funding round was led by General Atlantic, with participation from existing investor PSG Equity. General Atlantic, which previously invested in Airbnb during its early stages, brings considerable expertise in the travel tech space.
Founded by CEO Marcus Räder, COO Saber Kordestanchi, and CFO Mikko Nurminen, Hostaway was established to address a key challenge in the short-term rental market—the fragmented process of managing properties across multiple platforms. Initially bootstrapped, the company faced multiple rejections before securing $170 million from PSG Equity in 2023. Since then, Hostaway has experienced significant growth, with revenue increasing over tenfold.
Räder emphasized the company’s positioning: “We are in the right place with the right positioning at the right time.” Beyond leading the company, Räder continues to list his own properties on the platform while embracing a digital nomad lifestyle. Although headquartered in Toronto, Hostaway operates as a distributed team with 230 employees across 45 countries.
The short-term rental market remains a vast and largely untapped segment. While Hostaway previously managed over 100,000 properties, the global vacation rental market is estimated to include 21 million properties. The growth in global tourism—with 1.1 billion travelers recorded in the first nine months of 2024—signals further opportunities.
The newly raised funds will focus on enhancing Hostaway’s technology and broadening its service offerings. Hostaway’s platform allows users to manage rentals seamlessly across multiple platforms, with features like dynamic pricing driven by analytics. Moving forward, the company plans to leverage AI for more granular pricing strategies, predictive insights, and improved personalization.
Beyond software, Hostaway is expanding into ancillary services, including partnerships for smart locks, insurance, and other property management tools. The company’s marketplace serves as both a product hub for customers and a testing ground for new features.
General Atlantic’s Managing Director, Raph Osnoss, described the investment as a response to “significant tailwinds” in the short-term rental industry. “The market is inherently fast-growing due to changing traveler preferences,” Osnoss said. He noted the rising need for “professionalization” as property managers scale their portfolios.
While Online Travel Agencies (OTAs) like Airbnb, Booking.com, and VRBO dominate guest bookings, they often lack the tools for end-to-end property management. Hostaway addresses this gap, providing professional property managers with seamless tools to connect to OTAs while enabling direct relationships with renters.
Osnoss added, “Hostaway is a huge driver of volume to the OTAs, and the OTAs value them for that.”
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By Proptechbuzz
By Ravi Kumar
