HomeAway scores $250 million, competitors warned |
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HomeAway scores $250 million, competitors warned
One might think that a provider of online vacation rental properties wouldn't be faring well in this tough economy. Don't tell that to the investors who just plopped a whopping $250 million into HomeAway, the profitable Austin, Texas-based company that operates a directory of more than 115,000 vacation properties.
The Wall Street Journal says it is the largest venture deal in the country in the past eight years. And it quotes HomeAway investor Todd Chaffee who says the funding is "a statement of 'game over' [for competitors]."
That might not sit well with Seattle area rivals Escapia and SecondSpace. But on a positive note, at least HomeAway says it plans to use some of the capital for acquisitions.
Still, Escapia and SecondSpace will have to figure out new ways to survive against the financial behemoth. SecondSpace faces the bigger challenge, since its ResortScape business competes directly with HomeAway. The Bellevue startup, which is backed by Ignition Partners, also recently encountered some rough patches with layoffs, a lost contract and the departure of its CEO.
The lead investor in the HomeAway deal -- Technology Crossover Ventures -- has ties to Seattle's Internet industry. It was a big backer of Expedia, the Bellevue online travel agency. And it is among the investors in Zillow.com, the Seattle online real estate startup that has raised $87 million.
Founded in 2005, HomeAway has raised more than $455 million. That compares to the single digit millions raised by SecondSpace and Escapia.
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