Guesty leads short-term rental software race with $35M raise

Guesty has landed $35 million in funding, bringing the property management platform’s funding total to $60 million - the highest of any other software in the short-term rental space, the company says.

Viola Growth led the Series C round, with participation from Vertex Ventures, Journey Ventures, Kingfisher Investment Advisors, La Maison Compagnie d'Investissement and existing investors TLV Partners and Magma Ventures.

The new round more than doubles Guesty’s existing funding, which gained $20 million in a Series B round last April.

Guesty, which provides clients tools to manage their listings across multiple channels including Airbnb and Booking.com, will use the capital to introduce artificial intelligence and machine learning into the platform and grow its footprint in verticals adjacent to urban properties - particularly in the vacation rental space.

It will also open new offices, plus build out its Integrations Marketplace, which facilitates partnerships with third-party providers from keyless entry systems to housekeeping services to financing (Guesty announced its partnership with Clearbanc in July).

“The increasing growth of the space, thanks to sites like Airbnb, Booking.com and many more, has resulted in short-term lets commanding around 30% higher profits than long-term leases. With such a high demand from travelers, Guesty is filling a crucial role in helping property managers more efficiently manage their overwhelming list of to-dos and more importantly, grow their businesses,” says Amiad Soto, Guesty co-founder and CEO.

“This market will only continue to grow as we see the ripple effect of trends like remote working, the shared economy and travel becoming more of a commodity, rather than a luxury.”

Soto co-founded the Tel Aviv-based business in 2013 alongside his twin brother. The company graduated from Y Combinator in 2014 and is now used by both property managers and property management companies in more than 70 countries.

Guesty says its customers report a 150% increase in annual revenue, a 100% increase in annual listings and 50 or more hours saved per week working with the company.

In an interview with PhocusWire in May, Soto said investors “appreciate the size and potential of our market, and how focused we are on product quality. The results that Guesty achieved in those verticals, both in market share and product dominance, has been amazing and is growing exponentially. Our investors believe in our ability to be the leaders of consolidation in this market.”

Says Natalie Refuah, partner at Viola Growth, who will join Guesty’s board of directors: “Technology and AI continue to disrupt the innovation stack, acting as a catalyst to the digitization of ‘traditional’ areas such as real estate and travel. Guesty is leading the charge, fostering a more seamless experience for property managers while providing clear advantages to customers and ultimately, their guests.

“We believe that with its experienced and elite executive team, Guesty is fully equipped to modernize and revolutionize the property management ecosystem.”

As for other players in the space, Expedia Group bet on software company Pillow, acquiring it as a HomeAway subsidiary for an undisclosed sum in October.

In July, Lodgify raised $5 million to develop direct-booking technology, and GuestReady - one of PhocusWire’s Hot 25 Startups for 2019 - embarked on growth in Europe through new acquisitions and partnerships announced in December.