Startup That Manages, Sells Shares Of Second Homes Raises $75M At $1B Valuation
Pacaso, which was founded five months ago by two former Zillow executives to expand the market for second homes, has received $75M in equity funding in a Series B round that values the company at $1B. Greycroft and Global Founders Capital led the funding round, during which Pacaso also obtained $1B in debt financing.
Pacaso's platform divides second-home ownership into slices as part of a property-specific limited liability company, selling an interest in the LLC to buyers who want use of a second home but who are unable or unwilling to buy one in its entirety. The interest can be one-eighth of the home or larger.
"The reason that it’s growing so quickly is because consumers love the concept, and they love the idea of being able to own a second home at a much less expensive price metric,” former Zillow CEO Spencer Rascoff told TechCrunch.
Rascoff and Austin Allison left Zillow about 18 months ago to develop the concept for Pacaso. At the time of its launch in October, the company raised $17M in a Series A round led by Maveron, along with $250M in debt financing.
The new company — pronounced like the abstract artist's name — charges owners a 12% service fee at the time of purchase and also makes money from a $100-per-month management fee, for which Pacaso manages the property and handles the booking of its use.
The business model is more common in commercial real estate and fairly new to the vacation home industry, GeekWire reports. It is different than a resort timeshare in that Pacaso owners can sell their shares after 12 months of ownership.
The company has mostly been active in its home state of California, including Lake Tahoe, Malibu, Napa Valley and Palm Springs. Pacaso plans to use its new capital partly to expand to other parts of the country, with a longer-term ambition of growing in Europe, Mexico and the Caribbean.
