With a less than 1% share (compared with Airbnb's 19%) of vacation homes in the U.S., Vacasa is set to go public this fall via a special-purpose acquisition company (SPAC) that invested $485 million. This gives Vacasa an equity value of $4.5 billion.
TPG Pace Solutions is a SPAC that invested early in Airbnb and Uber. Vacasa is a Portland, Oregon, start-up. The merger of the two will allow Vacasa to become a publicly traded company, likely this fall.
The $634.5 million cash infusion Vacasa has received from investors so far is more than any other start-up in this category.
Besides the merger with TPG Pace Solutions, Vacasa has received private equity funding from Silver Lake, Riverwood Capital, Level Equity, Altos Ventures, Adams Street, and NewSpring Capital. The intention is to bring Vacasa to the top of a very fragmented market.
What Vacasa does
Vacasa is a vacation rental management platform for property owners. The more than 30,000 properties listed on the Vacasa marketplace span over 400 destinations, mostly in the U.S., but some properties are in Costa Rica and Belize. And because Vacasa is a property management company, it can offer clients access to property management tools to manage their short-term rentals.
Airbnb has shown the world that a huge market exists for vacation rental homes that provide a different experience than typical hotels do -- more room, which appeals to families and pet owners, and a more authentic travel experience. Because of this growing interest in vacation homes, Vacasa predicts a 31% multiyear revenue growth rate.
Vacasa has yet to make any money and projects a loss of $49 million for this year. But it expects to break even in 2023. Vacasa's goal is to get direct bookings and keep those customers who will, hopefully, rebook through the company's platform.
The prediction looks promising based on the level of investment dollars Vacasa has received and the number of visitors the site has attracted: 37 million visits in the first three months of 2021, up from 10 million in 2019.
The $485 million cash infusion from the newest merger opens up many opportunities for Vacasa, one of which might be more acquisitions and mergers. Vacasa has already acquired Wyndham Vacation Rentals for $162 million. The company is also focusing on expanding to Europe.
The Millionacres bottom line
Vacasa says what most start-ups say: namely, that its technology platform distinguishes itself from the rest of the pack. Maybe it does. CEO Matt Robert says the technology at Vacasa is "purpose-built" by integrating the platform with local service teams that take care of the properties. This keeps the Vacasa brand a consistent one. The proof will be in the pudding. But a lot of big investors are betting on this one.