Investors pour $100M into Portland’s Vacasa

Vacation rental management firm growing

By

Published:

 

PORTLAND — Portland-based Vacasa said Tuesday it has raised $103.5 million in its second round of funding, an investment the vacation rental management company will use to dramatically expand its national reach.

With the new private equity financing in hand, Vacasa said it expects to grow its 300-person Portland workforce by as much as 50 percent over the next 12 months. The company also is looking for new headquarters near its offices in the Pearl District, expecting to triple its footprint within three years.

Vacasa is attempting to consolidate the highly fragmented market of vacation rental management, aiming to use technology and scale to make it more efficient and profitable. The company’s highest concentration of rental properties is in Oregon. Vacasa said the new funding will allow it to make similar inroads nationally.

“A lot of it’s about replicating what we’ve already done here,” said Vacasa co-founder and chief executive Eric Breon.

Vacasa expects revenue will grow by roughly 70 percent this year. With Tuesday’s investment, Breon said he believes revenue could more than double in 2018.

Vacasa declined to specify how much of the Portland company was sold in Tuesday’s deal, but said it was less than half.

Silicon Valley private equity firm Riverwood Capital led the round, joined by another new investor, NewSpring. Vacasa raised a $40 million round last year. New York-based Level Equity led that round (first announced at $35 million), and joined other prior investors participating in Tuesday’s funding.

“We think there’s a great opportunity for a technology-driven leader like Vacasa to consolidate that and build a large national, even global, company,” said Jeff Parks, a Riverwood founding partner.

Vacasa provides management services at more than 6,000 vacation rental homes, generating revenue by charging booking, cleaning and other fees.

It lists properties online and uses technology to adjust prices dynamically, raising them at hot times and cutting them during slow periods. Vacasa has hundreds of employees in local markets, managing, cleaning and maintaining properties.

Airbnb and VRBO helped popularize online vacation rental listings, and Parks said they helped open the market for Vacasa by introducing travelers and homeowners to the appeal of booking online.

But while Airbnb and VRBO list properties, they don’t clean or maintain them. That’s a role historically played by small, local management companies that are often in the same communities where the rental homes are.

Vacasa is betting that it can manage huge numbers of these properties itself. It’s already made more than 60 acquisitions, all of them relatively small vacation management firms for which the Portland company paid no more than $10 million, and sometimes as little as $50,000.