Company that determines Airbnb rates raises $42 million
Beyond Pricing, a startup company that helps Airbnb users manage what to charge using an algorithm that calculates numerous factors, raised $42 million in a Series A funding round funding round directed by Bessemer Venture Partners.
It has come a long way since it raised $1.5 million in its first funding round in 2015, followed by $2 million the next year.
Beyond Pricing, which takes one percent of a booking in exchange for optimizing rates on a daily basis, has been hugely popular, handling more than 150,000 listings. It has grown from coverage of 26 cities to 7,000, and from four employees to 60.
“We skipped a lot of intermediary funding,” Beyond Pricing CEO Ian McHenry told TechCrunch. “We wanted to have a capital partner that could help us take a few more risks and build out a bunch of new products and go after Europe in a big way since it’s over half of the whole market.”
Beyond Pricing has handled about $2 billion in bookings so far, and it wants to use the new funding to continue to grow, and also to see if its algorithm would work for hotels with different types of rooms.
The Beyond Pricing website promises that you will “increase your revenue 40% with data-driven pricing,” works as follows. Users connect their Airbnb and other vacation rental platforms or rental calendar. Beyond Pricing then scours all the platforms for what similar homes charge, their vacancy rates, what hotels are charging, historic and current demand fluctuations, airline info, weather and more.
Users can look at charts of prices in their neighborhood or nearby hotels, and adjust the base and minimum rates before Beyond Pricing automatically applies its daily rates to the listing or lets the user export them to start earning the most possible.
“We wanted to have a capital partner that could help us take a few more risks and build out a bunch of new products and go after Europe in a big way since it’s over half of the whole market.”
What makes Beyond Pricing stand out is they let people have access to the same type of information hotels have at their disposal when they’re pricing rooms.
Beyond Pricing provides 365 uniquely optimized prices. While the platforms encourage people to rent their place out as much as possible to boost their take, Beyond Pricing wants people to earn as much as possible to grow its one-percent cut.
McHenry wants to expand the business to hotels to expand beyond just king or twin room classifications, and offer prices for types of suites that offer different amenities. Since the company is based on pitting travel services - including VRBO and HomeAway - against each other, McHenry is banking on Airbnb not being able to completely take over the vacation rental market.