TravelNest, an advertising optimisation platform for holiday rental owners, has secured a €3.4 million seed round from leading early stage venture firms Pentech, Mangrove Capital Partners and Frontline Ventures. Investors also include Mark Logan, ex-COO at Skyscanner, who has joined the company as a board member. The Edinburgh startup, which was founded in 2014, will use the fresh capital to expand its engineering team and further develop its product following early customer traction.
The vacation rental market has ballooned over the last decade and is expected to be worth $193bn by 2021 with the growth of large B2C players such as Booking.com and Airbnb driving the market for so-called ‘alternative lodging’. However the market is enormously fragmented, with property hosts needing to advertise on over 40 booking sites – from online travel agents and pay per listing sites to local listings and flash sale sites such as Groupon and Secret Escapes – to maximize occupancy. As a result, 56% of holiday rental dates go unsold in the UK and property owners are missing out on €42k of lost revenue per property each year.
Doug Stephenson, the founder and CEO at TravelNest commented: “This is a real headache for holiday rental hosts. Every property is unique and there’s hundreds of advertising and listing options, all of which offer something different. It’s very difficult to gauge what advertising equates to in terms of performance for each site and the task of boosting site rankings is very complex. This is a massive market but while the B2C side of the sector is well developed, the B2B side has so far been almost entirely overlooked.”
TravelNest is a product that intelligently manages all of a host’s advertising through a central platform. It gathers data from each site and optimizes advertising in order to increase revenue per rental, with an online dashboard that provides data on property views, occupancy and income, as well as comparing the performance of each site. Importantly, TravelNest will be free to use with the company instead making a commission from advertising booked through the platform.
The company launched in January this year and now has a team of 20 staff, which includes Alistair Hann as CTO (ex-Skyscanner) and Jeff Pole, previously Director of Product at Onfido. So far 90% of its customers are from the UK but it has global ambitions.
TravelNest founder Doug Stephenson added: “We see a very large opportunity to create value by intelligently matching supply and demand. With this experienced group of investors we have support for the long run but our focus right now is on product development.”
Both Mangrove Capital Partners and Pentech recently raised significant funds. Mangrove, an early backer of multi-billion exits Skype and Wix.com, raised $200m for its new fund in July while Pentech, an early investor in FanDuel and Nutmeg, raised about €100m in May.
Hans-Jürgen Schmitz, co-founder and Managing Partner of Mangrove Capital Partners stated: “The TravelNest team is exceptionally gifted. They have built this business out of their garage, with the conviction that the fragmented supply in vacation rentals offers significant potential for growth through intelligence and automation. We are excited to part of this challenge as Doug and his team help property managers capitalise on the massive benefits of new technologies and the Internet.”