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Lodgify raises $30M while focusing on the long tail of STR hosts

lodgify vacation rental software

Vacation rental SaaS startup Lodgify has just raised $30m in Series B funding. The solution acts as an online PMS and channel manager while offering features such as a full vacation rental website. Lodgify says that, unlike other industry players such as Guesty, it’s growing fast by focusing on the opposite end of the short-term rental industry: Individual hosts and small property managers, where 80% of the market is. Rental Scale-Up asked a few questions about this strategy to the Lodgify team.

Interview: Why Lodgify focuses on serving individual hosts and small property managers

lodgify individual hosts and small property managers

Rental Scale-up: Is Lodgify’s customer base the strongest in Europe? In how many languages is it available?

Our biggest market is actually the U.S.& Canadian markets, but our customer base is also strong in Europe. The Lodgify software is currently available in five languages: English, Spanish, French, Italian and German, and our sales, onboarding and support teams have native speakers in these five languages to cover all our customers’ needs. Nevertheless, our website templates are available in more than 30 languages.

Rental Scale-up: Tell us more about the 80% of long-tail users that you are targeting. Why do think that others neglect these people?

We can’t really say why others neglect these users, but we can say that Lodgify’s proposition has always been clear since day one: to empower individual hosts and small property managers to get started and grow their short-term rental businesses.

That’s why our software is easy-to-use and accessible for all users, independent of their technical knowledge or experience.

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Rental Scale-up: What is different about your tools and marketing to satisfy the needs of this side of the market? What are the unique challenges that you’ve faced?

Our website builder makes it very easy for our customers to build a bookable website from scratch in just a few minutes and accelerate the time to receive their first direct booking. No technical skills are required. While our channel manager makes distribution effortless for our customers to distribute their property to the top OTAs. Together, both features help our customers to grow their bookings and consequently, their revenue.

Our software differentiates through our focus on ease of use and the importance we put on generating direct bookings through your own website. Our customers who successfully scaled their business through Lodgify then also start to increasingly use more of our advanced features that help them save time in managing a growing amount of bookings such as automating payment collection, messaging, task management, etc.

The business challenge we faced was the same as it is for any SMB SaaS startup: the smaller your customer, the harder it generally is to make the unit economics work. However, we solved this business problem by building a strong product and efficient marketing. Going back to your previous question on potential reasons why others neglect our segment: it’s very hard to make it work.

Rental Scale-up: Your press release says: “This investment will help fuel the expanding ecosystem of tools and services”: In concrete words, what do you mean? Build a marketplace? Acquire complementary solutions?

Yes, we will continue to scale our marketplace of third-party apps. Already today Lodgify integrates with over 16 external app providers (such as PriceLabs) and this number will strongly grow in the upcoming months.

But most importantly, we’re going to continue to invest in building our product and services in-house. We have an exciting product roadmap ahead to help our customers scale their businesses with our all-in-one vacation rental platform.

Lodgify raises $30M in Series B funding to ramp up global growth 

Lodgify has secured $30 million in Series B funding. The investment round was led by Octopus Ventures with participation from Bonsai Partners, Aldea Ventures and ICF (Institut Català de Finances) and existing investors, Intermedia Vermögensverwaltung and Nauta Capital.

Lodgify will use the funds to accelerate global expansion, boost product growth and expand customer support. Lodgify’s mission is to empower any host or vacation rental business worldwide to get started and grow their business through technology. This investment will help fuel the expanding ecosystem of tools and services that both small and large hospitality firms increasingly depend on to professionalize operations and scale up.  

This is great news for our customers! Lodgify is a customer-first company, and we will invest all the funds in product innovation and expanding our service offering to help our customers achieve their business goals,” said Lodgify’s CEO and co-founder Dennis Klett.

Twice named in Wired’s Hottest European Startups list, Lodgify offers an all-in-one solution that enables vacation rental hosts to generate more bookings and manage all bookings from one centralized place. Its Software-as-a-service platform includes a website builder that allows vacation rental hosts to easily build their own website and accept direct bookings and payments without requiring any tech skills and seamless API integrations with all the main vacation rental channels including Airbnb, Vrbo, and Booking.com. Lodgify is a preferred software partner for all of these channels.

“Lodgify has carved out a leading position for itself in the overlooked SME vacation rental market. We were impressed with their product leadership and customer focus, which has come through in the impressive growth they’ve helped their customers achieve, even through the pandemic period. We’re looking forward to partnering with Lodgify’s experienced leadership team to execute its growth plans, which include an exciting pipeline of new product initiatives.” said Uthish Ranjan, Principal at Octopus Ventures.

“Their ability to support both individual hosts and fast-growing property management businesses to generate more bookings and save time via automation with their comprehensive software suite is impressive,” added Andrés de la Morena from Bonsai Partners.

In recent years, Lodgify has grown its R&D team to over 70 employees and the entire company to almost 200 from 43 different nationalities. 

This hiring boost will also allow Lodgify to accelerate its product development and release new features at an even quicker pace, in line with the company’s overall plans for the coming years.

Uthishtan Ranjan from Octopus Ventures and Andrés de la Morena from Bonsai Partners have joined Lodgifyʼs board of directors.

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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.

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