Avantstay Raises $160M for Vacation Rental Platform

A Travel Startup Secures Significant Funding After Successful Pandemic Pivot

A travel technology company, initially challenged by the onset of the COVID-19 pandemic, has announced a substantial funding round following a period of growth and adaptation. This demonstrates its ability to thrive even amidst difficult economic conditions.

AvantStay's Growth and Funding

AvantStay – a platform specializing in the decoration and listing of properties owned by others for short-term vacation rentals – has secured $160 million in a Series B funding round. Over the past two years, the company has experienced a tenfold increase in revenue and expanded its property portfolio to over 1,000 locations.

The newly acquired capital will be allocated towards further expansion, specifically increasing the number of properties managed on the platform. Additionally, resources will be dedicated to the continued development of its technology, as the company broadens its services within the property rental sector.

Investment Details

This funding round was co-led by Tarsadia Investments and 3L Capital, which previously spearheaded AvantStay’s Series A round. Participation also came from existing investors including Plus Capital, Bullpen Capital, and Convivialite.

New, strategic investors joined the round, including Capital One, Saluda Grade, Coller, Greenhawk, Stephen Pagliuca, Fred Tuomi, Jerry Coleman, and Jay Mckee. Notable celebrity investors, such as Paul George and Shawn Mendes, also contributed to the funding.

The AvantStay Model: A Premium Rental Experience

AvantStay’s core concept centers on providing a premium rental experience for high-end homes, offering an alternative – or even an enhancement – to the traditional five-star hotel stay. This is achieved through the strategic application of technology.

The company has developed several key tools, including Voyage, its proprietary operating system for property management; a concierge app designed to assist guests before, during, and after their stays; a user-friendly booking platform; and a recently launched real estate platform.

Expanding Services and Real Estate Partnerships

The concierge service is integral to AvantStay’s strategy of providing rentals with amenities comparable to those found in luxury hotels. The company intends to further expand the range of services offered through its technology investments.

AvantStay will also continue to develop its real estate business, facilitating connections between vacation property investors and suitable properties. It acts as a broker and exclusive rental agent for these homes, but does not directly own any properties.

Company Traction and Growth Metrics

Founded in 2017 and based in Los Angeles, AvantStay had previously raised $25 million over four years. This latest funding represents a significant increase – and a substantial amount for a Series B round – highlighting the company’s growing momentum, particularly considering the challenges faced by the travel industry.

In the last two years, AvantStay has added over 700 homes and expanded into 80 new destinations, partially through six strategic acquisitions. This period also saw a tenfold increase in revenue.

Guest Statistics and Profitability

According to Sean Breuner, AvantStay’s CEO and co-founder alongside Reuben Doetsch (CTO), approximately 750,000 guests utilize the company’s network of properties. The average occupancy rate is seven guests per property.

While currently not consistently profitable, AvantStay achieved profitability during the pandemic by implementing cost-cutting measures and shifting its focus to longer-term rentals targeted towards corporate clients.

Industry Trends and Competitive Landscape

AvantStay is not alone in finding innovative solutions during a challenging period. Platforms like Peek and Easol have gained traction by providing technology solutions for event creators and organizers. Similarly, HotelEngine and OTA Insight, which develop tools for accommodation providers, have recently secured significant funding.

Positioning Against Airbnb and Future Growth

While Airbnb dominates the private home accommodation market – and is one of AvantStay’s 60 marketing partners – Breuner believes there is substantial opportunity to build a distinct business focused specifically on high-end properties.

He argues that many consumers and business travelers have yet to fully recognize the potential for a superior experience compared to traditional luxury hotels. “Customers are starting to meet the demand from an experience perspective in rental homes,” he stated. “It has always lagged hotels by a wide margin. But the experience now matches the needs and requirements of what a guest is looking for.”

Investor Confidence

Jodi Kessler, a partner at 3L, commented, “Since we led AvantStay’s Series A investment over two years ago, we’ve watched the company not only grow their supply and revenue tenfold, but also navigate one of the worst possible macro shocks that occurred in the hospitality industry.”

Kessler continued, “Their incredible execution and resilience, combined with a massive tailwind in the travel sector for AvantStay’s product makes us excited to double down on and support the team as they continue to build both a world-class hospitality brand for travelers, and a vertically integrated platform through which individuals and institutions can invest in short-term rental properties.”