Vacasa gets $108M lifeline from Airbnb’s rescuer

Vacasa, a wounded vacation rental unicorn, secured $108 million from a tech investor that helped bail out Airbnb in April.

Private equity firm Silver Lake led Vacasa’s Series D, with participation from existing investors Riverwood Capital and Level Equity, the companies said Tuesday. The round brings Vacasa’s total funding to $634.5 million.

Although Vacasa declined to disclose its valuation, Silver Lake also led the company’s $319 million Series C in October 2019 at a $1 billion valuation. Since then, however, Vacasa’s encountered turbulence. In February, co-founder and CEO Eric Breon stepped down. A few weeks after his departure, travel ground to a halt due to coronavirus.

Founded in 2009, Vacasa handles bookings, housekeeping and customer service for homeowners in exchange for a commission between 20 percent and 40 percent. Pre-pandemic, the Portland, Oregon-based startup had nearly 30,000 rentals on its platform, and it employed 6,000 worldwide and 400 at its headquarters. Last year, it purchased Wyndham Vacation Rentals, with 9,000 units under management, for $156 million in cash and $10 million in equity.

But in March, Vacasa laid off employees after a “significant decline in reservations and revenue.” At the time, it had 6,000 employees worldwide, and 400 at its headquarters in Portland. The cuts, it said, were necessary to “preserve the longevity” of the business. It also shifted some to part-time work, and slashed executive pay.

In a statement, CEO Matt Roberts acknowledged the “challenges” inflicted on the travel industry by Covid-19. “As we begin to emerge from this global crisis with an infusion of capital, we are in a very strong financial position to capture consumer demand,” he said. He also predicted a shift from hotels to professionally managed vacation rentals, as travelers seek more privacy and cleanliness. To that end, Vacasa said it launched a service called Premium Clean, which follows recommendations for the hospitality sector from the Centers for Disease Control and Prevention.

Silver Lake, known for leveraged buyouts of companies including Dell Technologies and Skype, has been on an investment tear during the pandemic. It’s invested in deals worth more than $7 billion, according to a recent analysis by Business Insider, pouring money into companies including Waymo, Twitter and Jio Platforms, an Indian telecom operator. In April, it invested $1 billion in debt and equity in Airbnb with Sixth Street Partners, reportedly at a 10 percent interest rate. Shortly after, it invested $1.2 billion in Expedia Group with partner Apollo Global Management.

Vacasa declined to disclose a total employee headcount, but it said it brought back “many” of its furloughed employees over the past several weeks and it has resumed hiring.

Reservations in May were six times those in April. It now has bookings in 723 cities, up from just 357 during the peak of the crisis. And guests are now booking weeks in advance, not months. (Vacasa’s booking window is 39 days, down from 142 days.)

Before Covid-19, Vacasa was reeling after Breon stepped down. Roberts, who was CEO of OpenTable, is serving as interim chief. In January, the company also replaced its chief technology officer after its CTO of three years took a job in another industry.

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