Being in the business of convincing people that they deserve a vacation is hard. Being in the business of convincing people that they can co-own a vacation house and enjoy it at the same time can be deceptively harder.
Getaway — different from another venture-backed Getaway, which sells escapes to tiny cabins in the middle of nature — wants to make it easier for people to rent luxury real estate and invest in it too. The company, co-founded by Ali Nichols and Amr Shafik, wants to do it all. It has raised $4.4 million from Cowboy Ventures, XYZ Ventures and Night Ventures, as well as $1.5 million in debt financing.
The platform, boasting the tagline “investments with a view,” is officially launching soon and plans to debut its first investment offering to investors later this month, pending SEC approval.
“We are actually purchasing properties,” Nichols said. “Everything that we post on our website, we have full faith on because we’re using our own financing to actually close on the home, get it rent ready, and have it actually be an asset as an active Airbnb or VRBO property that is already making money.” Then, she continues, the startup sells off ownership to members as a company Getaway buys shares in the property, so there’s “joint skin” in the game. “Over time, our goal is to have a much more streamlined process from a financing perspective where we could be in contract on a home, and folks can invest at that point and then we close on it,” she added.
Getaway isn’t the first startup trying to optimize the exclusive world of vacation rentals. Built by former Zillow executives, Pacaso helps people buy and co-own luxury vacation homes and has raised over $1.5 billion in venture capital to date according to Crunchbase. Pacaso is also one of the fastest companies to ever become a unicorn (valued at over $1 billion). Ever.
Getaway’s co-founders say that users can invest in a Getaway property starting at $1,000 per ownership share, while Pacaso can cost anywhere from $400,000 to $3 million to purchase one-eighth of a property. Owners are “strictly prohibited” to rent out their portion of a Pacaso property, a Pacaso spokesperson confirmed over email. Getaway properties, meanwhile, are active vacation rentals that also generate recurring passive income.
Also, importantly, Getaway lets owners get discounted rates in its whole portfolio of homes; the flip side is you have to pay to stay at a home you partially own.
Another startup in the space is Here, which wants to make investing in vacation rentals as easy as investing in stocks. Unlike Pacaso and Getaway, Here is trying to scale the financial upside of owning a home, not necessarily the vacation aspect of it.
Getaway’s competitive moat is that it wants to be everything, everywhere, all at once. Nichols described wanting to be a cross between Here, where “your experience really ends at the dollar you put in and you hope to watch it grow on the app,” and Pacaso, where “it’s not really a financial investment, it’s an investment in travel and spending time in beautiful homes.”
Folks do want access to these beautiful homes and so our approach is how do we actually take that and make it more accessible and make sense,” she said. “If I look at the sea of all of the competitors that I can put $1,000 into, and all things are equal, actually being able to enjoy the portfolio of homes all over the country and soon to be world, hopefully, is just a huge benefit from a consumer perspective.” The company currently has two homes, one in Scottsdale, Arizona and one in Miami, Florida and is closing one soon in Palm Springs, California.
“It seems like for consumers, there’s a new safe investment every single day,” Shafik said. “How do you cut through the noise and make sure that you reach the right person that this [opportunity] would be interesting to, but there’s also like the demand generation angle to it and the customer acquisition angle to it.”
Building a wealth opportunity and an experience for a broader consumer market comes with its own challenges. Time will tell if Getaway can get there.
Source @TechCrunch
