Luxury Travel Startup Inspirato Closes $20M Growth Equity Round
Luxury vacation homes are proving to be a very promising business for Inspirato, a Denver travel startup that has caught the eye of some of Silicon Valley and New York’s biggest investors.
Inspirato announced Wednesday that it has raised a $20 million growth equity round. W Capital Partners is a new investor in the round, and Institutional Venture Partners and Millennium Technology Value Partners participated.
While its investors are prominent in the tech industry—Silicon Valley powerhouse Kleiner Perkins Caufield & Byers also is an investor, although it did not participate in the current round—Inspirato isn’t a tech company per se. The startup is a luxury vacation club that gives users access to more than 240 properties in the U.S., Mexico, Europe, and the Caribbean.
Inspirato will use the money to keep expanding its staff, portfolio of properties, and invest in technology, a release from the company said.
With the new money, Inspirato has raised nearly $70 million in equity financing since it was founded in 2010, with the vast majority coming from tech investors. Other backers include Access Venture Partners, a firm based in the Denver area, and Revolution Places, the holding company formed by AOL founder and former chair Steve Case.
Their investment has helped make Inspirato one of Denver’s fastest growing startups, with 207 of its 237 full-time employees based in its downtown Denver office.
As Inspirato president David Kallery explained in an interview last December after his company took over rival Portico, Inspirato is a competitor of sorts with Airbnb and VRBO. All three are attempting to gain a foothold in the travel industry by placing users in privately owned homes.
Still, there are substantial differences between them, Kallery said. The most notable is the market—Inspirato is focused on luxury travel, and its properties are in destination locations and offer resort-style amenities.
The business model also is different. Inspirato members have to pay initiation and annual fees to become and remain members, on top of nightly rental fees. The company says it has 8,000 members, more than double the number it had in July 2013.
Inspirato also has long-term leases on the homes in its portfolio and is active in managing and in many cases upgrading them with new electronics and furnishings and remodeling them, according to a company spokesperson.
That hybrid of offering resort-caliber service and amenities in private homes appears to have gained traction, according to Stephen Wertheimer, managing director at W Capital Partners.
“Inspirato’s rapid growth is a clear reflection that luxury travelers value the many benefits of vacationing in homes over hotels, but still want exceptional quality on every trip,” he said. “By removing the uncertainty that can come with online vacation rentals, adding personal service and resort-style amenities, and providing members with compelling value, Inspirato has created clear separation within its space.”