Evolve Vacation Rental Network announced on Thursday that it had raised USD 80 million in capital.
Funds and accounts advised by T. Rowe Price Associates led the round. Winslow Capital Management, Foxhaven Asset Management, and Arrowmark Partners also invested in what the company described as the equivalent of a Series C round.
Brian Egan, CEO and co-founder, said the company would use the funding to solidify its expansion in its current markets in North America and the Caribbean.
The vacation rental tech sector continues to produce outsized funding rounds as different businesses try to take market share by offering varying models.
The round is shy of the USD 103 million Series B financing that rival company Vacasa raised last October. In spring 2017, TurnKey Vacation Rental raised a USD 21 million Series C. The national incumbent player is Wyndham Vacation Rentals. In Europe, companies like Guesty, Hostmaker, and Wyndham's European-based business unit have been making gains.
Egan said he didn't consider TurnKey, Vacasa, or Wyndham to be significant competitors in that their business models differ and that has led to attracting different types of customers.
Evolve, which has 300 employees based in Denver, hires local vendors in markets across North America to offer second homeowners management services for 9,000 properties - up from 4,000 a year ago. The growth has come through a mix of online marketing and word-of-mouth referrals and Egan said the company could sustain the growth rate without marketing costs eating into its unit economics.
Unlike most of its other national competitors, Evolve offers an a la carte model for services. Its basic plan costs 10% and doesn't include housekeeping or maintenance but does include all aspects of driving rental income as a on-ramp to marketing a property on major channels like Airbnb, HomeAway, and TripAdvisor, such as by shooting professional photos and creating a listing, offering advice on setting rates, and handling all guest interactions.
Egan said his company's main marketing challenge is educating people who have been doing all the rental work themselves or who have hired a local property manager at fees of often 40% of rents. Evolve is trying to offer a middle way that keeps cost down but lets owners choose to stick with preferred local vendors for housekeeping and maintenance if they wish.
“Our model opens an ability to scale rapidly across markets,” Egan said, adding that his company hires local inspectors to make sure properties match owner descriptions.
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