Why We Invested in Naya Homes
The short term rental market has been completely transformed over the last decade. AirBnB and VRBO streamlined property discovery and booking for consumers. In mature markets like the US, short term rentals (STRs) have experienced incredible growth. Even amidst the COVID-19 pandemic, last year was the best year in history for short term rental performance. Demand for STRs in the US was up ~13% in December 2021 compared to December 2019 (and ~53% compared to December 2020). STR occupancy also reached 62%, up 5% from 2020, and 10% from 2019. In the US in 2021, STR earnings saw a ~40% increase compared to 2019.
In mature markets, the success of STR booking platforms are underpinned by companies like Vacasa, which streamline rental management for homeowners. However, outside the US, and specifically in LATAM, similar owner support platforms have yet to meaningfully support STR demand.
With this in mind, we’re thrilled to announce our investment in Naya Homes. We led their $5M seed round, joining alongside our friends at Primary Ventures (also our co-investors at Chief). The company’s initial focus is to build a tech-enabled STR property management platform for LATAM.
STR management and optimization software is compelling for several reasons. First, as an asset class, STRs provide the highest investment yield for residential real estate, as pricing can be adjusted to match demand and seasonality. Depending on location and market conditions, STRs can generate 2–3x gross booking revenue as compared to longer term rentals. In emerging markets like LATAM, there is limited data across real estate even for well traded assets, and even less available STR data unless you manage your own inventory. Managing STRs creates opportunities to unlock invaluable insights for moving into adjacent business lines underpinned by the same data sets.
STR property management software is also asset light, unlike more capital intensive mechanisms capitalizing on the residential rental market. In the US, many higher end rental companies own, and even build, their own supply.
Beyond our belief in the core product and market, Naya has the benefit of macros tailwinds, such as remote and flexible work trends continuing to drive demand for STRs. Long-term stays of 28 days or more were AirBnB’s fastest growing stay category as of Q1 2022. Cities with time-zone alignments are, and likely will continue to be, especially desirable for US remote workers.
We believe the Naya team is uniquely positioned to build a massive, category defining business. Humberto, Roberto, and Iacopo collectively have backgrounds scaling operationally intensive business in LATAM, ranging from Uber to Sonder. Moreover, they share our thesis that STRs are a massive and growing asset class that offers homeowners a new mechanism of passive wealth creation and independence. We couldn’t be more excited to join them on this journey — you can follow their progress here.