homeaway.com Raises $250 million

Vacation rental marketplace homeaway.com this week announced it had completed a record breaking US$250 million equity capital raise.

TechCrunch reports that this comes on top of $209 million previously raised over two rounds.

The company released a statement saying it was “a record investment that reinforces the company’s leadership position in travel’s fastest-growing segment”. According to Venture Source the financing deal is the largest minority investment of a US Internet company in the last eight years.

homeaway.com will use proceeds “to fund additional strategic investments, eliminate all debt and provide working capital for increased marketing and promotions”. They will also introduce a share repurchase program.

The bid was led by Technology Crossover Ventures (TCV) with existing investors Institutional Venture Partners (IVP) and Redpoint Ventures.

“We look to invest in companies with market leadership positions, great management teams, and compelling growth opportunities. HomeAway is such an investment,” says Woody Marshall, TCV general partner. “We believe HomeAway will become a leading Internet brand just like TCV’s past investments in market leaders including Expedia, Netflix, eHarmony, CNET and Orbitz.”

TCV have also invested in zillow.com.

Brian Sharples, CEO and founder of homeaway.com said:

“The TCV lead investment demonstrates their confidence in our business model, and the extraordinary potential in front of us. We expect to benefit tremendously from their experience and record in building leading consumer Internet and travel companies.”

The company states that the US vacation rental marketplace is valued at more than $24 billion, according to a first-of-its-kind research study, PhoCusWright’s Vacation Rental Marketplace: Poised for Change and research conducted on behalf of HomeAway by Illuminas, an international research consultancy, estimates the combined UK, Germany and France marketplace at the same size.

TechCrunch argue that the deal is “seriously overvalued” and that since homeaway.com has bought almost all its competitors there is little room for growth by acquisition.

homeaway.com acquired vacationrentals.com, abritel.fr and ownersdirect.co.uk in 2007 and now has 11 vacation rental sites in its portfolio, as well as escapehomes.com, which connects buyers and sellers of second homes and resort real estate.

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