Business Startups Venture

Proptech Startup Beyond Pricing Raises $42.5M Series A from Bessemer Venture Partners

Beyond Pricing, which has developed “dynamic pricing” software for the short-term rental industry, has raised $42.5 million in Series A funding from Bessemer Venture Partners.

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Beyond Pricing’s automated data-driven software – which the company claims to be “the first of its kind in the industry” – is aimed at independent property owners, managers and developers, a group the company says are “underserved.”

These independents are “increasingly fighting off competition in the form of VC-backed vacation rental platforms and hospitality conglomerates that are entering the fast-growing space,” Beyond Pricing said.

It charges 1 percent per booking, with the goal of hitting “that sweet spot in terms of supply and demand.”

The startup defines short-term rentals as vacation rentals, such as the homes and apartments you’d find on Airbnb or HomeAway, as well as other rentals like apart-hotels, which are increasing in popularity across the U.S.

“Any property that serves as a home base for a short-term stay, in the same fashion as a hotel might, is a property we can serve,” said CEO Ian McHenry.

Background

Beyond Pricing CEO and co-founder Ian McHenry

Co-founded in 2013 by McHenry and CTO David Kelso (veterans of the airline and hotel industries), the San Francisco-based company said it leverages over 10 billion proprietary data points in an effort “to make the most accurate pricing recommendations in the industry.” Its goal is to give independents the ability to “competitively price their properties, regardless of the platform they list on, and see up to a 40 percent increase in revenue.”

“Our customers make up the majority of the short term rental industry, but don’t have the resources to invest in their own software, and have traditionally relied on analog ways of pricing their properties,” McHenry said.

It’s platform agnostic so its software integrates with sites like Airbnb and VRBO, as well as systems like HomeAway Software and Streamline, to give property owners and managers the ability “to harness..[its] big data machine learning algorithms to automatically adjust and update their prices everywhere they list.”

Beyond Pricing previously raised a total of $3.5 million in seed and post-seed funding in 2015 and 2016. Via email, McHenry said the company’s revenue grew by over 2.5 times last year. Its headcount has also climbed to 60, compared to 25 a year ago.

Looking Ahead

Beyond Pricing currently dynamically prices more than 150,000 listings in over 7,000 cities globally, and has priced more than $2 billion in bookings. The company plans to use its new capital to develop an expanded suite of products. It also plans to grow its presence in Europe, starting with an office in Lisbon, Portugal.

“We have spent so much time proving our model with our existing customers that we’re keenly aware of what their unique pain points are,” McHenry wrote. “In addition, the short term rental and vacation rental market in Europe is twice that of the US, so while we plan to continue to expand in the US we see a huge opportunity to continue to grow in Europe.”

Brian Feinstein, a partner at Bessemer Venture Partners, said Beyond Pricing is an example of a company that is “transforming” an industry that has been “historically underserved by software.”

“While hotels have fully embraced technology and dynamic pricing, the short term rental industry is still underpenetrated,” he said. “We were impressed with the Beyond Pricing team’s ability to consistently deliver revenue growth for their customers and think they are positioned to become the market leader in short term rental software.”

Illustration: Li-Anne Dias

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