Hostaway announces $365m strategic growth investment

Finland: All-in-one vacation rental software and management system, Hostaway, has announced that it has secured a $365 million strategic growth investment.

The investment round was led by global growth investor General Atlantic, with participation from existing investor PSG Equity, which led Hostaway’s $175 million fundraise in May 2023.

Hostaway said that it plans to partner with General Atlantic and PSG Equity to further propel its growth strategy, including international expansion, product development and AI initiatives. Upon completion of the transaction, General Atlantic and PSG Equity will both be significant minority shareholders in Hostaway, and the investment will mark one of the largest transactions to date in the company’s market segment.

Founded in 2015 by Marcus Räder, Saber Kordestanchi and Mikko Nurminen, Hostaway aims to enable short-term rental owners and property managers to automate and simplify property management. The company helps property managers to scale and grow their businesses through one platform with hundreds of API connections and integrations.

Today, the company’s integrated marketplace has over 200 marketplace partners, curating premier vacation rental software and tools within the industry for customers with properties in over 90 countries. Hostaway allows owners and managers to manage all aspects of their vacation rental business, from property management to channel management, AI, automation tools, analytics and reporting, communication, marketing and operations.

Hostaway has become the first property management and channel management software company to earn the highest partnership designations from the three leading online travel agencies – Airbnb, Vrbo and Booking.com – and it also currently has preferred relationships with Google, Expedia, and Homes & Villas by Marriott Bonvoy.

The company has recently launched a range of tools and add-ons to further address customer needs, including Dynamic Pricing by Hostaway, an automated solution to help customers maximise revenue; Hostaway Capital, to provide flexible loans specially catered to the property management sector; Hostaway Insurance, to provide coverage for property damage during a rental period; and Smart Lock integration to further streamline the property management and guest experience. Hostaway has also integrated AI in its automation tools to support property owners and managers across guest messaging, content creation and language translation.

Looking ahead, Hostaway wants to further capitalise on global tailwinds and demand through geographic expansion to key markets – including building upon its presence in France, Italy, and Spain – and intends to leverage General Atlantic’s expertise in scaling companies at the intersection of vertical software, integrated payments, and the travel and hospitality sector globally.

Marcus Räder, co-founder and CEO of Hostaway, said: “We are excited to partner with General Atlantic, a firm with deep global experience in our sector. This transaction is a critical milestone that will enable Hostaway to expand our commitment to delivering continued product innovation and invest further in AI-driven tools as we support our customers in growing and managing their businesses.

“Also, we are excited to leverage this investment to further expand our footprint across the world, especially in key markets like France, Spain, and Italy. We have identified like-minded and decisive partners in General Atlantic and PSG Equity and are thrilled to collaborate with them on the next stage of our journey.” he added.

Raph Osnoss, managing director at General Atlantic, said: “Hostaway has emerged as a category leader with a differentiated product addressing the distinct needs of short-term rental property managers, a dynamic and growing industry. We greatly admire the company’s high velocity of innovation and dedication to supporting its customers, and we look forward to working with this impressive team.”

Matthew Dorr, principal at General Atlantic, added: “We believe Hostaway is poised for continued growth, and we are thrilled to work alongside PSG to support the company across a number of value creation initiatives.”

Edward Hughes, managing director at PSG, said: “Our journey with Marcus and the wider Hostaway team began in 2023 and we have continued to be impressed with the quality, offering and strong growth of the platform. Hostaway has already grown three-fold since making our investment, which is a testament to the company’s deep expertise in the short-term rental property space and the strong global customer demand for its products.

“There is a lot to be proud of and we are excited to continue to support Hostaway in this next chapter alongside General Atlantic,” he added.

William Blair and Cambon Partners acted as financial advisers to Hostaway.