Lodgify just raised €600,000 in seed funding. What made Australian investors support this European startup?

- May 21, 2015 2 MIN READ

It was announced yesterday that Lodgify, a startup that allows users to create their own vacation rental sites closed a €600,000 (AU$844,646) seed round led by angel investor Chris Hitchen, who also happens to be a venture partner at Square Peg Capital’s office in Germany, as well as Howzat Partners and Venrex Investment Management. Although based in Europe, the startup has some pretty strong ties to Australia with Australian angel investors such Finn Kelly (Wealth Enhancers) and Andrew Menzies (SellMyCastle) joining other prominent investors like Roland Zeller (Travel.ch) and Kilian Thalhammer (former MD of PAYMILL) on the deal.

Lodgify was cofounded by Gabriele and Marco De Gregorio, Dennis Klett and Naveen Sharma in 2013 and is based out of Spain. The company is part of the Seedcamp alumni which is one of Europe’s leading accelerator and mentoring programmes.

It is a very interesting platform that plays in the vacation space; it could be described as a B2B solution for small operators and individuals that wish to commercialise their own properties. Users of the platform can easily create their own website for their properties and manage their reservations in real-time without ever having to pay commission.

Lodgify offers scalable subscription plans based on a monthly fee for both vacation rental owners and managers with one to 500+ properties. The service includes mobile­ friendly website templates, an online booking engine, reservation system and channel manager.

Basically the software that the Lodgify team has created enables users to run their small accommodation-for-hire business ventures at the same level of professionalism and scale that a major hotel chain.

“Lodgify’s mission is to empower vacation rental operators to grow their business through technology,” says Klett. “Our product pipeline is filled with innovative features and new website templates tailored to the modern needs of hospitality businesses. With this funding we can aggressively expand our product development operations.”

As established, the funds will be used to further enhance the company’s website-building software; it will go towards expanding the product team and creating additional features on the site that will be unveiled at a later date.

Lead investor Chris Hitchen as well as other investors involved in the round said they have been very impressed with the Lodgify team. Hitchen added, “We are very impressed by Lodgify’s technology-­focused approach to tackling the vacation rental industry’s challenge to generate more direct bookings. Their intuitive user interface and set of innovative software tools positions them strongly in a lucrative and growing market.”

Those are powerful words coming from Hitchen who is developing a track record for backing successful startups including Australian technology companies like GetPrice, SellMyCastle, CoinJar and AudienceTV.

He is right though. Lodgify is a startup that is capable of scaling; and in comparison to its competitors such as the well funded Y Combinator alumni company MyVR and other startups like Planyo and Checkfront, the UI/UX is pretty above average. Although there are opportunities to move beyond targeting just vacation rentals and also allow businesses like small independent hotels to utilise the platform, Klett has said that the team has a clear focus on what they are working on right now.

“Our focus is on vacation rentals, however, we are receiving a lot of interest from hoteliers who would like to challenge the dominant position of Online Travel Agencies and regain more control of their bookings,” says Klett. “They see the potential of our software helping them to drive direct booking and build their own brand.”