Owning and managing a vacation rental property is by no means a uniform experience. But the commonly cited draws — and drawbacks — seem quite consistent.

On the pro side, vacation rentals can pull in far more per night than a standard lease while also letting owners keep their place available for occasional personal use.

On the con side, overseeing a short-term rental can quickly turn into a hassle. From inconsistent income streams, to difficult guests, to damage, there’s no shortage of complaints on forums for property owners and managers.

Founders, in recent years, have had some limited success smoothing out kinks in a business model that Airbnb set out to popularize 16 years ago as a Y Combinator newbie. Contributions from those who’ve raised capital in the past few quarters include tools for vacation property investors, curated short-term rental offerings, and software for managing properties.

To get a sense of where money has been going of late, we used Crunchbase data to assemble a list of 14 companies funded since last year with a focus on short-term rentals.

Larger funding recipients

Toronto-based Hostaway, a provider of vacation rental management software, is by far the largest funding recipient on our list. The company raised $175 million last year in a round led by PSG Equity.

Founded in 2015, Hostaway offers tools to manage bookings, guests and vacancies across different platforms such as Airbnb, Vrbo and Booking.com. Property managers use its software for things like responding to inquiries, automating repetitive tasks, and analyzing finances.

Overmoon is another investor favorite, picking up a $40 million Series A, along with $40 million in debt financing, in January. The company operates a portfolio of family-oriented vacation rentals, with most current offerings in beachy Florida locales.

San Francisco-based Kindred, meanwhile, closed on a $15 million Series A last year for a  membership-based home-sharing network where there is no cash exchange between the guest and the host. It tempts would-be members with artfully staged photos of flats in destinations such as London, New York and Vancouver.

An industry giant, and a trail of disappointing exits

So far this year, we haven’t seen a particularly strong environment for hospitality-related exits, with both the IPO and M&A markets rather sluggish for consumer-facing offerings. If prior track records are any indication, it’s also not the easiest industry for exits.

Of course, the vacation rental industry can point to one giant startup success story. Category-defining Airbnb is currently a roughly $92 billion market cap company, quite profitable, and still growing (albeit perhaps a bit more slowly than many investors had hoped.)

In other vacation-related ventures, startup investors have endured a much bumpier ride. In particular, several companies in the space that went public during the market boom of 2020 to 2022 have not performed so well.

One example is Sonder Holdings, an operator of boutique apartments for short-term stays in more than 40 cities worldwide. Its listings look lovely, from the art-bedecked urban industrial loft in Philadelphia to the beach-adjacent historic building in Cannes.

Sonder’s financials, however, are anything but eye candy. After raising more than $500 million in venture funding, the company went public via SPAC merger in January 2022. Since then, it’s largely been a straight downward trajectory, with shares down more than 95%.

London-based Selina Hospitality, operator of a global network of getaway locations marketed to digital nomads, has also fared poorly. The heavily venture-backed company, whose shares are currently worth about a nickel each, has been terminating leases and has delayed filing its annual report.

And Berlin-based HomeToGo, an Insight Partners-backed international vacation rental platform, hasn’t done so well either. Shares have declined sharply since the company went public on the Frankfurt Stock Exchange in 2021.

Vacasa, perhaps the best-known public company in the vacation rental space after Airbnb, has also struggled to gain market favor, with share prices falling steeply over the past several quarters. In its earnings announcement last week, the Portland company said it is laying off 800 people, or 13% of its workforce, after the quantity and prices of summer bookings came in below expectations.

A vacation from expectation

Fortunately for recently funded startups, the current preferences of public market investors aren’t that pertinent. Even if this proves to be a cruel summer for vacation rental revenues in some markets, there’s still plenty of overall demand for well-appointed getaway locations.

In coming years, as under-performers scale back and surviving operators hone their skills at reducing vacancy or overhead, perhaps we’ll see the supply-and-demand dynamic swing back in a way that produces much more profitable returns for those still in the vacation rental game.

Related Crunchbase Pro list

• Vacation Rental-Related Recently Funded Startups

Illustration: Dom Guzman