Less than one year after launch, Pacaso is valued at $1.5B

Second-home startup will expand to Europe on heels of $125M funding round

National /
Sep.September 14, 2021 12:35 PM
Less than one year after launch, Pacaso is valued at $1.5B

Pacaso CEO Austin Allison (LinkedIn, Getty)

A mere concept less than a year ago, second-home startup Pacaso just hit a $1.5 billion valuation and is expanding internationally.

The San Francisco-based platform for buying and selling fractions of vacation homes said today that it raised $125 million in a Series C round led by SoftBank’s Vision Fund 2 — a first-time investor in the company — and will begin operating in Spain later this year.

Launched in October 2020 by former Zillow executives Spencer Rascoff and Austin Allison, Pacaso closed a $75 million Series B round in March at a $1 billion valuation.

Fifth Wall, the largest proptech-focused venture capital firm, also participated in the Series C, alongside existing investors Greycroft, Global Founders Capital, Crosscut and 75 & Sunny Ventures. Bloomberg first reported the news. Pacaso said in a release that its equity funding now totals more than $215 million.

Fundamentally, Pacaso wants to make it easier to buy, own and sell a shared second home in high-end vacation markets like Lake Tahoe, Aspen and Malibu. Through its platform, prospective owners can buy as little as a one-eighth share of a property worth millions; Pacaso’s network of agents help them establish limited liability companies for joint ownership. The buyers then pay Pacaso to manage, maintain, and facilitate access to the home.

Pacaso’s business grew exponentially during the pandemic alongside the swift rise in home prices and swelling demand for second homes among newly mobile white-collar workers. The company manages $200 million of real estate on its platform and has an annualized revenue run rate of $330 million, it said.

In the early spring, homes in most of the 25 markets where Pacaso operates were trading for 30 percent more than they were a year earlier, Allison, who is CEO of the startup, said in an interview. Recent months have witnessed a “cooling off” of the luxury second-home market, but prices are still up 15 percent year-over-year in most of its locales.

“The market is still crazy, just not as crazy as it was at the peak,” Allison said. “It’s still hotter in second-home markets than primary-home markets.”

Pacaso’s attempt to reinvent the timeshare model has not been without challenges and uncertainties. While prospective buyers have flocked to its website — traffic was up 196 percent in the second quarter from the first, the company said — how well the fundamentals of the sharing economy hold up in luxury single-family real estate is an open question.

“Exponential growth adds exponential complexity,” Allison said. The company’s expansion beyond the U.S. — first in Europe, then eventually in Mexico and the Caribbean — will only make quality control harder.

“We’ve gone from basically zero to 120-plus people on our team across 20 states and three countries. We’ve gone from one market a year ago to 25 destinations today,” he said. “All that growth, and we’re not slowing down. We’re just speeding up.”

An IPO is a possibility but not in the near future, Allison said.

“When it makes sense to go public, we plan to consider that opportunity seriously,” he said. “But right now we’re very well-funded and don’t have any near-term plans to announce.”






    Related Articles

    arrow_forward_ios
    Chicago Bulls’ DeRozan buys mansion from Michael Jordan’s ex-wife at discounted $4.5M
    Chicago Bulls’ DeRozan buys mansion from Michael Jordan’s ex-wife at discounted $4.5M
    Chicago Bulls’ DeRozan buys mansion from Michael Jordan’s ex-wife at discounted $4.5M
    Lakefront mansion in Kenilworth is being shopped privately for record $14M
    Lakefront mansion in Kenilworth is being shopped privately for record $14M
    Lakefront mansion in Kenilworth is being shopped privately for record $14M
    Cook County Assessor Fritz Kaegi with Aon Center, Willis Tower and Aqua Tower (Getty, Facebook via Kaegi)
    Chicago’s trophy landlords infuriated as Kaegi boosts property assessments
    Chicago’s trophy landlords infuriated as Kaegi boosts property assessments
    Chicago Alderman Walter Burnett (Getty, Burnett)
    “Folks can still afford to live there”: Q&A with Chicago Alderman Walter Burnett
    “Folks can still afford to live there”: Q&A with Chicago Alderman Walter Burnett
    Waterton, Angelo Gordon tap JLL to sell River North Park apartment building
    Waterton, Angelo Gordon tap JLL to sell River North Park apartment building
    Waterton, Angelo Gordon tap JLL to sell River North Park apartment building
    Scottie Pippen and his Highland Park mansion (Getty, Berkshire Hathaway/KoenigRubloff Realty Group)
    Scottie Pippen sells Highland Park mansion for $1.8M after five years on the market
    Scottie Pippen sells Highland Park mansion for $1.8M after five years on the market
    Former Obama Fundraiser Tony Rezko’s son paid $13.7M for 22-story building site
    Former Obama Fundraiser Tony Rezko’s son paid $13.7M for 22-story building site
    Former Obama Fundraiser Tony Rezko’s son paid $13.7M for 22-story building site
    CEO of Bender Companies Kurt Bender with the complex (Bender)
    Multi-family housing community sold for $70M as suburban Chicago housing market stays red-hot
    Multi-family housing community sold for $70M as suburban Chicago housing market stays red-hot
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...