Pacaso Raises $75M, Achieves Unicorn Status in 5 Months
Pacaso Secures $75 Million in Funding, Achieving Unicorn Status
Pacaso, a startup less than a year old focused on expanding access to second home ownership, has announced a $75 million growth funding round, resulting in a $1 billion valuation.
Investment Details and Key Players
The equity financing was co-led by Greycroft and Global Founders Capital. This funding is particularly noteworthy given the rapid growth and strong team behind the company.
Austin Allison and Spencer Rascoff, former Zillow executives, conceived the idea for Pacaso after departing from Zillow approximately 18 months ago. Zillow currently boasts a market capitalization of $32.9 billion.
Democratizing Second Home Ownership
Pacaso enables individuals to purchase shares in, and jointly own, a second home. Spencer Rascoff explained the company’s mission:
“We aimed to broaden access to second homeownership, making it attainable for many, rather than remaining a luxury reserved for a select few.”
Rapid Growth and Unicorn Status
Pacaso has achieved unicorn status – a valuation exceeding $1 billion – faster than any other company, according to internal analysis of Crunchbase data.
“The company’s growth is exceptional, exceeding anything I’ve previously experienced,” Rascoff stated to TechCrunch. “This rapid expansion is driven by strong consumer interest in the concept of affordable second home ownership.”
Financial Resources
In addition to the recently announced equity financing, Pacaso has secured $1 billion in debt financing. Prior to this, the startup raised $17 million in a Series A round led by Maveron, alongside $250 million in debt financing.
Notable investors in the latest financing include Sukhinder Singh Cassidy and Theresia Gouw of Acrew Diversify Capital Fund, First American Financial, Shea Ventures, and Jeff Wilke, former CEO of Amazon Worldwide Consumer.
A Novel Co-Ownership Model
Pacaso utilizes a unique co-ownership model facilitated by the creation of a property-specific LLC. This approach aims to reduce both the cost and complexities associated with second home ownership, while also providing an alternative to traditional vacation rental options.
The company’s model differs significantly from traditional timeshares, which grant the right to use a fixed period in a property. Pacaso focuses on bringing together a small group of co-owners to purchase a share of a single-family home, allowing for “ongoing access throughout the year.”
How Pacaso Operates
Pacaso acquires properties, either outright or through shared ownership. The company then collaborates with local real estate agents to market these properties.
Shares in the homes are then offered, ranging from one-eighth ownership to a larger percentage.
Pacaso currently holds brokerage licenses in over a dozen popular second home markets, including Napa, Lake Tahoe, Palm Springs, Malibu, and Park City. Potential buyers can explore curated listings on the company’s website, featuring both active properties and previews of homes being considered based on buyer demand.
Integrated Services
Beyond listing properties, Pacaso provides integrated financing options, “upscale” interior design services, professional property management, and proprietary scheduling technology.
Growing User Base
Since its launch, Pacaso reports over 500,000 website visitors and 60,000 “aspiring buyers” who have expressed interest in learning more about second home co-ownership. The company has already facilitated co-ownership for approximately 100 families.
Austin Allison estimates that there are roughly 100 million second homes globally, with the majority remaining vacant for 10 to 11 months annually.
Future Expansion Plans
The newly acquired capital will be used to expand into new markets, transitioning from the west coast to the east coast, and eventually internationally – including Europe, Mexico, and the Caribbean. The debt financing will support the purchase of additional home shares.
“A significant portion of families with disposable income aspire to own a second home,” Allison noted. “However, cost or justification often present barriers. Our co-ownership model provides an innovative solution to this widespread challenge.”
The company intends to broaden its offerings to include homes across a wider price range, including more affordable options.
Industry Perspective
Dana Settle, co-founder and partner at Greycroft, described Pacaso’s performance as “nothing short of momentous.”
“Pacaso is pioneering a new category that will fundamentally alter how people approach buying and owning second homes,” she added.
Greycroft was also drawn to the experience and collaborative history of Pacaso’s founding team.
“Their deep understanding of the market and prior collaboration are evident in their rapid progress,” Settle explained to TechCrunch.
Settle also drew parallels to Uber and Airbnb, which successfully leveraged underutilized assets to create thriving businesses.
“This represents another opportunity to leverage technology to enhance accessibility within a market,” Settle stated.
Leadership and Expansion
To support its growth, Pacaso has appointed Nina Tran as its chief financial officer. Tran previously led Waypoint Homes through its public offering and subsequent sale to Invitation Homes.
Spencer Rascoff is also involved with Supernova Partners Acquisition Company, which is merging with Offerpad to take that company public. He is also an investor in Doma and Cheese, among other startups.