Holidu Secures $45M Funding After 50% YoY Growth

Holidu Secures $45 Million in Series D Funding

Holidu, a vacation rental startup, has successfully raised $45 million in its Series D funding round. This new investment brings the company’s total funding to over $120 million since its establishment in 2014.

Funding Details and Investors

The current funding round was spearheaded by 83North, with contributions from existing investors including Prime Ventures, EQT Ventures, Coparion, Senovo, Kees Koolen, Venture Stars, Lios Ventures, and Chris Hitchen. Additionally, Claret Capital (formerly Harbert European Growth Capital) participated with both equity and debt financing.

Strategic Allocation of Funds

The newly acquired capital will be strategically invested in product development. Specifically, Holidu intends to double the size of its technology team and expand its partnerships to broaden its supply of vacation rental listings.

Benefiting from Shifts in Travel Behavior

Despite the challenges faced by the travel industry during the global pandemic, Holidu has capitalized on evolving traveler preferences.

Increased Demand for Private Accommodation

Travelers who previously favored city breaks and hotels are increasingly opting for private holiday accommodations. This shift is driven by a desire for enhanced safety, greater space, and access to fresh air, particularly following coronavirus lockdowns.

Importance of Flexible Cancellation Policies

Flexible cancellation options have become a crucial factor for travelers. Holidu’s proactive implementation of flexible cancellation and payment solutions is credited with contributing to its growth throughout the pandemic.

Holidu’s Meta Search Engine Capabilities

Holidu operates a meta search engine that aggregates listings from prominent platforms such as Airbnb, Booking.com, HomeAway, and Vrbo.

Comprehensive Search Tools

The platform provides holidaymakers with tools to refine their searches, offering detailed filters for property amenities, property types, and proximity to attractions like beaches and lakes. Users can also specifically search for listings with free cancellation policies.

Growth and Market Performance

According to CEO and co-founder Johannes Siebers, the company observed a significant change in traveler behavior.

“We’ve noted a trend where many travelers are choosing vacation rentals in rural areas over traditional hotels or city accommodations,” Siebers stated. “Although the European vacation rental market experienced a decline in 2020 due to travel restrictions, Holidu achieved growth by quickly adapting to the increased demand for domestic lodging and flexible cancellation options.”

Financial Performance in 2020

Holidu experienced approximately 50% year-over-year growth in 2020, alongside a more than twofold increase in its contribution margin. This performance enabled the company to achieve profitability within its search business.

Future Outlook

Siebers anticipates continued growth in 2021, despite the ongoing uncertainties surrounding the pandemic and political landscape.

Expanding Reach and Business Model

Holidu’s search engine is currently active in 21 countries, compiling over 15 million vacation rental offers from more than a thousand travel sites and property managers. In July 2020 alone, the platform was utilized by over 27 million travelers.

Revenue Streams

Holidu employs a mixed business model. It generates revenue through commission per click with a portion of its partners and through commissions on bookings made through the majority of its partners.

Bookiply: Direct Property Owner Services

Through its Bookiply brand, Holidu offers a software-and-service solution to property owners, assisting them in maximizing bookings. This includes managing the digital aspects of property listings in exchange for a percentage of successful bookings.

Bookiply’s Growth Trajectory

In 2019, Bookiply managed 5,000 properties. Siebers projects that this number will exceed 10,000 by the end of the current year.

Dominance in Key Leisure Destinations

Bookiply has established itself as a leading provider of vacation rentals in popular leisure destinations, including the Balearic Islands, Canary Islands, and Sardinia – all favored locations for German travelers.

Expansion of Bookiply’s Service Network

Part of the Series D funding will be allocated to establishing additional Bookiply offices across Europe, enabling the company to expand its service offerings to regional vacation rental owners.

Onboarding and Digital Optimization

The expansion aims to reach property owners who have not yet listed their properties online, as well as to optimize existing digital listings that are underperforming. Establishing physical service locations is intended to facilitate onboarding for owners who are new to digital listing platforms.

Investor Confidence

Laurel Bowden, partner at 83North, expressed confidence in Holidu’s performance.

“The vacation rental market is highly competitive, and Holidu’s growth during the pandemic has been remarkably impressive,” Bowden stated. “We are drawn to their strong operational efficiency and demonstrated ability to expand into new markets.”

Advocacy for Fair Competition

In 2020, Holidu joined a coalition of startups in the travel, accommodation, and jobs sectors, signing a letter to the European Commission advocating for antitrust action against Google.

Concerns Regarding Google’s Market Dominance

The coalition accused Google of leveraging its dominant position in search to unfairly compete in other markets through practices like self-preferencing, warning that such behavior could jeopardize homegrown businesses.

Holidu’s Perspective on Google’s Practices

Johannes Siebers addressed the ongoing concerns regarding Google’s behavior.

“Given its size and market position, we believe Google carries a special responsibility in the search market,” Siebers explained. “We advocate for merit-based competition to foster innovation and provide users with the best possible products. We joined the letter to the EC because we believe Google does not fully uphold its responsibilities in all areas of its product offerings.”

Call for a Level Playing Field

Siebers further elaborated on the issue.

“The way Google displays specialized search products in many travel verticals does not, in our view, align with the principle of fair, merit-based competition. It grants Google’s own product visibility that no other player could achieve in the same manner.”

Confidence in Diversified Business Model

Despite these concerns, Siebers expressed confidence in Holidu’s diversified business model.

“We have not yet observed significant changes in Google’s search box integration, but we are optimistic that Google will eventually create a level playing field. Even if this takes time, we are not overly concerned, as we have a strongly growing offering towards homeowners through Bookiply, which is independent of Google’s activities in the market.”

Support for Digital Markets Act

Holidu supports the European Commission’s legislative proposal to apply ex ante regulations to “gatekeeper” platforms, a designation likely to include Google. The proposed Digital Markets Act (DMA) is still under development.

“We are supportive of the commission’s proposal and believe that both the act itself and its enforcement will drive innovation and deliver better products for customers,” Siebers concluded. “Enabling free and fair competition is a core deliverable for a regulator in a marketplace, and we have high expectations towards the EU in this regard. Achieving this will undoubtedly lead to increased innovation, investment, and activity in areas currently impacted by gatekeeper activities.”