fbpx
vintory banner

Investment: Why are scaling property managers and listing sites turning to crowdfunding?

crowdfunding for vacation rental businesses

We recently covered crowdfunding campaigns by property management company GuestReady and luxury vacation rental listing site Plum Guide. Crowdfunding is part investor outreach and part communication to target clients (both guests and homeowners, in the vacation rental industry).

 What is crowdfunding and for whom?

  • Crowdfunding is the practice of funding a project by raising many small contributions from a large number of individuals, typically via the internet.
  • Enables NGOs, individuals, start-ups and SMEs, to source funds for a specific project via an online crowdfunding platform.
  • Funds used for entrepreneurship, social causes, music and movies, real estate, publishing, healthcare or technology projects.
  • It may be i) a gift with or without counterparts, ii) a loan/bond with or without interest, iii) a share of equity in the raising company, or iv) an hybrid.
  • A more democratic form of philanthropy (gift) or capitalism (loan/equity-based)?

Which advantages?

  • A quick way to raise funds.
  • Often a limited/no-loss of ownership or control on the project
  • Bypassing the traditional bank financing in case banks are not accessible (too small grants for seed ideas) or a bank loan is not wished.
  • Testing the project on the market, the success of the raising giving an idea of the potential success of the project or product.
  • Leveraging the raising process as a marketing tool to communicate and create loyalty.

Which drawbacks?

  • Relevant only for innovative projects and projects that share values/passion with a crowd ready to spend.
  • It may not be successful. In case the target amount is not reached, the funds collected shall generally be returned.
  • Contrary to business angels, crowdfunders generally do not bring network, contacts, or experience.
  • Confidentiality and Intellectual Property (IP) issues: Dilemna communicating vs. protecting the project.

From an investor’s point of view?

  • Any individual can be a potential crowdfunder, but also companies or professional investors.
  • It is a way to diversify its assets when a return is expected.
  • A way to feel involved in a project.

Which key success factors?

  • A great marketing strategy around the project. A good command of social networks. Communicating with passion.
  • Putting yourself in the shoes of the audience.

Numbers and market – At global scale

  • According to Fundly, the global amount raised by crowdfunding amounted in the thirties of USD billion in 2019 (Mordor Intelligence quotes Fundly).
  • Crowdfunding market is expected to witness a growth at a CAGR of over 16% during the forecast period (2021-2026).
  • The global market for crowdfunding is moderately consolidated due to the presence of a few companies dominating the market with the presence of many other companies competing between themselves.

A business case: Crowdfunding in France (source)

Funds raised were x6 from 2015 to 2020, with a +62% in 2020 (~exponential).

  • 2015: EUR 167m raised
  • 2016: EUR 234m
  • 2017: EUR 336m
  • 2018: EUR 402m
  • 2019: EUR 629m
  • 2020: EUR 1,020m raised

=> Focus on 2020:  73% loan/bonds – 21% gift with counterparts or not – 6% equity.

=> Focus on 2020:  Average EUR 8,820 raised per project in 2020.

Covid impact?

With the recent outbreak of COVID-19, the crowdfunding market is witnessing significant growth, especially donation crowdfunding to support and help communities, people, and many organizations fight this pandemic.

Examples of crowdfunding in the short-term rentals industry

Two relevant examples as explained by Rentals United :

  • At Ease Rentals (2020): the first short-term rental company to cater exclusively to military and federal personnel – USD 500k target.
  • BecoStay (2020): A listing site for eco-friendly homes – USD 30k target.

Other examples, taken from industry news site Short Term Rentalz:

  • Nuurez raises $1.1m in crowdfunding campaign (2021). Nuurez allows investors to list owned and rented properties on short-term rental sites such as Airbnb, without the process of buying properties and managing tenants.
  • Borrow a Boat £750k crowdfunding campaign goes live (2021).
  • GuestReady reaches €1.5m crowdfunding goal in 24 hours (2020).
  • Pass the Keys crowdfunding round surpasses £1m (2020).

Examples of crowdfunding investors’ decks:

Plum Guide

de investment crowdfunding perks

Guest Ready

guestready business model

Share:

Facebook
Twitter
Pinterest
LinkedIn
Rental Scale-Up

Thibault is the founder of Rental Scale-Up. He owns vacation rentals in St. Barths and Bali. He also leads innovative projects for companies within the vacation rental industry. Feel free to reach out to Thibaut Masson on Linkedin.

scaler

Table of Contents

Dear Short-Term Rental Industry Member, Join Our Scalers Network

Our Mission

We bring together short-term rental industry members to create valuable business and personal relationships. With the support of vetted peers, you can deliver on your next individual project goals faster, work in private groups to share doubts and successes, and become a new voice that shapes the conversation about our industry.

Whether you are a property manager, an owner, an industry vendor, a listing site operator, an investor, or a consultant, you can become a member of our Rental Scale-Up family.  As property managers and industry vendors may not have the same needs, some of our activities work by affinity groups. For instance, we have one version of the mastermind group sessions reserved for property managers and owners, and another one for vendors and listing sites. This way, you get feedback from peers who understand your pains and can get you faster to getting results.

1. Action, Transformation & Results

  • Mastermind Group for Property Managers & Owners: A mastermind group is a group of peers who meet to give each other advice and support. Facilitated by Rental Scale-Up. One session every 2 weeks with your group for a least 3 months.
  • Ask a Property Manager: Hosts, owners and property managers benefit from the experience of a successful property manager. (1 per month)
  • Groupwork: Report of the month co-creationA group of Scalers volunteer to write a report on the topic of the month. The result is published on RentalScaleUp.com, with full credits to each participants. (1 per month)
  • Mastermind Group for Industry Vendors & Listing Site Operators: A mastermind group is a group of peers who meet to give each other advice and support. Facilitated by Rental Scale-Up. One session every 2 weeks with your group for a least 3 months.
  • Ask an Expert Anything (for vendors and listing sites): An outside expert (e.g. a copywriter) shares their experience on a topic in an Ask Me Anything (1 per month)

2. News & Live Discussions

  • Investment & Deals  Discussion: Thibault and an M&A specialist/VC go over recent deals, M&A, investment rounds. Live, monthly.
  • Curated news: Save time. We read the news for you, curate the articles, and add our exclusive comments (weekly, in the Network Newsletter)
  • US Trends & Data Discussion: We analyze AirDNA’s latest report on US trends and zoom in on key markets (e.g. urban vs vacation rental markets).  Network members share what they see in the markets. Live, monthly.
  • Monthly Live online conference: Every month, our Network deep dives into a topic that is crucial to the short-term rental industry. 3 experts share their insights, best practices and answer your questions live.
  • European Trends & Data Discussion: We analyze AirDNA’s latest report on European trends and zoom in on key markets (e.g. UK, France, Italy, Spain).  Network members share what they see in the markets. Live, monthly.
  • Weekly Teardown with Thibault: Rental Scale-Up founder tears down one business news, every week, live.  Networker members share their views. No filter.

3. Facilitated Networking

  • Networking Booster: Meet new business partners and improve your networking game at an online event. Our team facilitates the event to make it easy for you to connect with your peers. (monthly)
  • Business Profile: Each new Scaler gets their profile featured in a dedicated article on RentalScaleUp.com. Get more visibility and authority.
  • In-Person Meetups: We meet in real life, either during a large vacation rental conference or in a city of our choice (quarterly)
  • Job Offers: Network members can not only see job offers but also post theirs. If desired, job offers can be extended to all Rental Scale-Up readers (free and paid).

4. Deals on industry software and products

  • Get Discounts: Enjoy exclusive deals brought to you by fellow Network members. Only in our Deals section. Monthly.
  • Offer Deals and Discounts: Network members may offer exclusive deals to fellow members, from discounts on stays at their properties to lifetime deals on vacation rental software. Only in our Deals section. Monthly.

Ready to join right now?

Scalers comes in 3 levels:

  • Scalers Insights, the limited, content-only version of the network. Great those who just want to get the insights but have less time for business transformation.
  • Scalers Network: Transform your business and get results. Get more things done. You get support, accountability, networking, training, and investment opportunities
  • Scalers Network+ : Avoid the hassle of quarterly payments and pick an annual membership. Qualify for bonuses good for your business (e.g. lead generation)

Not quite ready? Sign up for our free newsletter

Weekly insights straight into your email inbox.

On Key

Related Posts

Actionable insights

Take the Right Decisions for Your Rental Business thanks to our Weekly Industry Brief.

Exclusive newsletter for rental entrepreneurs.