HomeAway invests in CanadaStays, fighting Airbnb on northern front
HomeAway, the vacation rental giant, said that it had led a C$6 million round of fundraising for CanadaStays, a holiday home platform in Toronto.
The 30-employee startup claims to generate vastly more inventory than any other holiday rental platform in Canada, including foreign interlopers, such as Airbnb, FlipKey, and HomeAway.ca itself.
It says it has 30,000 properties in Canada, and 15,000 in the United States, the Caribbean, and Latin America.
HomeAway’s minority stakeholding comes with a cross-listing deal. Property owners listing on CanadaStays will also appear for free on HomeAway.ca. To be listed on HomeAway.com and VRBO, they have to bundle (therefore, pay) to be listed on HomeAway.com and VRBO.
Torstar, publisher of The Toronto Star and other media properties, also participated in the round. Talks have begun for marketing partnerships.
The deal is a milestone for Rogers Venture Partners, the venture capital firm that helped to incubate the startup. It is the investment arm of Canadian telecom titan Rogers.
Today’s announcement is also a milestone for Toronto investment firm Hedgewood, another early investor.
The investment suggests that HomeAway is launching a northern front in its market share war against Airbnb, the San Francisco-based peer-to-peer short-term rental platform.
Last October, Airbnb opened its first Canadian office, hiring a country manager and two other employees in Toronto.
Airbnb’s sweet spot has been for short-term rentals in cities, while HomeAway’s sweet spot has been second homes at resort areas.
But there is some overlap. HomeAway says 12% of its listings overlap with Airbnb’s, and that duplication is increasing.
For instance, last year it saw a double-digit percentage increase in demand for Montreal, which is a major hub for Airbnb.
Airbnb would like to diversify its portfolio of properties to go beyond cities, where it competes against hotels, to include resort areas, where hotels are less common.
This matters particularly in Canada, where the geographic dispersal of vacation rentals favors properties in the countryside, especially along lakes and on islands.
Likewise HomeAway would like to outflank Airbnb, while bolstering its own core market in owner-owned rentals. Its Canadian investment extends the company’s growth through a series of marketing agreements, investments, and acquisitions globally.