- The second-home-co-ownership startup Pacaso raised $75 million in equity and $1 billion in debt.
- The round makes it the fastest company to reach unicorn status, with a $1 billion valuation.
- The firm also announced it was profitable this quarter and hired veteran CFO Nina Tran.
- See more stories on Insider’s business page.
Pacaso, a startup that allows multiple people to co-own a second home, is officially a unicorn.
The company — which launched its modern take on the classic timeshare model just last year — announced on Wednesday that it had raised $75 million in equity and $1 billion in debt in a round led by Greycroft and Global Founders Capital.
The firm is now valued at $1 billion and is the fastest American startup to reach a unicorn valuation ever, it said. The 5-month-old company trumps the previous record holder, the scooter company Bird.
Pacaso also announced that it was EBITDA profitable in the first quarter of 2021.
The startup works by splitting ownership of a vacation home between many buyers, giving them time at the home that is proportional to the percentage they own. It’s similar to the traditional timeshare model, except Pacaso’s buyers have an actual ownership stake in the property, instead of just the right to use it for a designated chunk of the year.
The company’s goal is to make vacation homes — in California, for now — accessible to more people, while reducing the waste inherent in having a second home that sits empty for much of the year.
Pacaso has ambitious leaders
Pacaso was cofounded by Spencer Rascoff, a cofounder and former CEO of Zillow, and Austin Allison, the CEO and founder of the real-estate-transaction-management software Dotloop, which Zillow purchased in 2015. Rascoff, in particular, has had a busy pandemic: Other than launching Pacaso, he’s raised three separate special-purpose acquisition companies, one of which is in the process of taking iBuyer Offerpad public.
Allison, who is the CEO of Pacaso, said the company’s main competition was the old-school do-it-yourself style of co-ownership, like when friends or family members go in on joint property purchases.
“Pacaso is institutionalizing, or commercializing, that process to eliminate the stress, hassle, and problems,” Allison said. “We believe we will surpass the old category of second homeownership.”
Hiring Nina Tran as chief financial officer is another move toward these goals, Allison said. Tran has decades of experience as a chief financial officer, including at Starwood Waypoint Residential Trust, a leading single-family-rental company that helped to institutionalize the single-family-rental market.
Pacaso has fielded 60,000 inquiries in less than 6 months
The company launched publicly in October after trying out the idea earlier in the year under a different name. It has received 60,000 inquiries from prospective customers looking to buy a share in a vacation home.
“Throughout my career as a founder and tech investor, I have experienced tremendous growth and innovation among startups, but none compare to Pacaso,” Rascoff, Pacaso’s chairman, said in a press release.
Allison told Insider the company would use the new funding to expand from the West Coast to vacation-rental hot spots on the East Coast and the rest of the country by the end of the year. Eventually, he added, the company will be international.
Originally, Pacaso’s leadership planned to purchase homes and then sell shares to customers. But the team quickly realized that it would be better off assessing leads from prospective customers, buying the properties, and then selling off the additional shares. As a result, the company has purchased homes with price tags from $500,000 to $15 million.
The main criteria are that the home is turnkey and doesn’t require any costly or time-consuming renovations.
Co-owners of a property can opt out by first selling their shares to the other co-owners. If the latter group refuses, Pacaso will find another buyer. The firm also partners with First Republic Bank, which allows buyers to finance up to half their share as if they were taking out a mortgage.