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Vacation rentals site gets $250 million funding
SAN FRANCISCO, Nov 10 (Reuters) - HomeAway Inc, an online marketplace for vacation rentals, said on Monday it has raised $250 million, an amount far higher than the average financing Internet companies get from venture capital investors.
The Austin, Texas-based company, which has grown through acquisitions, said it will use the cash to buy more companies, pay off debt and launch a share repurchase program.
HomeAway will also increase its marketing and promotion efforts, as vacationers seek cheaper alternatives to hotel rooms in the midst of a wide economic downturn.
HomeAway founder and Chief Executive Brian Sharples said the company will also aggressively market the idea of vacation homeowners renting their places out.
"There are nearly 14 million vacation homeowners in the U.S. and Europe, and most are still not aware of how easy and profitable it can be to rent their homes, even if for just a few weeks each year," Sharples said in a statement.
Founded in 2005 with $49 million in venture capital financing, HomeAway owns 11 vacation rental sites. In 2006, it secured an additional $160 million, with which it funded the purchase of VBRO.com, a rental site.
Technology Crossover Ventures, which provides funding to late-stage, or mature, private technology companies, led the latest round of financing. Institutional Venture Partners, which also focused on late-stage investments, and Redpoint Ventures, are existing investors in HomeAway who participated in the latest round.
Last year, the average venture capital round was $7.7 million, according to the National Venture Capital Association, a venture capital trade group.
But companies occasionally do receive fatter checks from venture capitalists and other investors.
Microsoft Corp (MSFT.O) invested $240 million in social networking site Facebook Inc last year. Ning, another social networking site co-founded by Netscape founder Marc Andreessen, raised $60 million earlier this year from undisclosed investors.
(Reporting by Anupreeta Das; Editing by Bernard Orr)
