Key Stats

PitchBook as of Jan 2020

Funding

46M

Employees

50

Location

San Francisco

About the Company

Beyond Pricing is an automated data-driven pricing solution for your Airbnb and vacation rental. Their software integrates with leading listing sites like Airbnb and VRBO, as well as the largest property management systems like HomeAway Software and Streamline, allowing property owners and managers to harness their big data machine learning algorithms to automatically adjust and update their prices everywhere they list.

They utilize real-time market data to ensure their price recommendations to maximize revenue and occupancy for their hosts. The Beyond Pricing SaaS solutions allow you to link your Airbnb listing, preview their year of recommended rates, and sync those prices directly to your Airbnb calendar. It also maximizes revenue for owners and hosts on home-sharing and vacation rental sites like Airbnb and HomeAway.

Source: Crunchbase

My Take

As a big fan of dynamic pricing, I was very interested to learn about Beyond Pricing. For the majority of rental property owners who are using their property for supplemental income, managing pricing is a huge, scary hassle. Instead of properly managing their pricing, some owners set base rates that are often based on what their property went for last year. While using a year over year pricing scheme is easy, shifting supply/demand trends and variable competitor pricing often leaves property owners listing their property at the wrong price.  Beyond Pricing looks to use AI/ML to provide rental owners a better dynamic pricing mechanism. Beyond Pricing claims that they can achieve 10-40% revenue improvements, which would be a drastic improvement. If true, those claims would make their pricing of 1% of booking revenue seem like a drop in the bucket.

A win-win-win

I think software like beyond pricing is a win-win-win situation. For property owners it has the chance to drastically improve their revenue generated. For the listing service (such as AirBNB) more revenue leads to greater percentage based fees. For the dynamic pricing engine, they are able to gain additional profits by increase the renter’s revenue as well. Thus, all three parties are happy.

Competition

To date, their have been a few players that have come and gone in the rental property dynamic pricing software market. The closest comparable I could find is Wheelhouse , which also provides a dynamic pricing software. With similar funding and a similar sized company, winning in this market will likely come down to who can achieve scale fastest, perhaps through partnerships. I would guess that rental websites like AirBnB are likely to partner with these companies as they look to achieve the win-win-win above. As the rental website choose their winning software, they are likely to look at which ones are driving the largest revenue growth, which ones have the largest base, which ones provide the best integrations, and which ones provide supplementary data that will benefit other aspects of the rental website.

Scalability

The rental market is quite large, and because Beyond Pricing is taking a cut of the overall revenue (as opposed to selling a B2B or B2C software license), they have the opportunity to manage a huge number of dollars.

As a software company, Beyond Pricing is highly scalable as there are very few incremental costs for each new customer added.

The data is also highly scalable. To achieve the desired revenue targets, Beyond Pricing likely has to churn through both scraped data and data from their customers. As customers continue to come on board, Beyond Pricing will gain more data. In turn that data can be used to make better pricing decisions for a wider swath of customers.

One concern for a software company like this is the cost of integrating. Beyond Pricing is reliant on a small number rental property websites who already have a long backlog of integrations. Moving to the front of the line for these websites can be quite costly. Beyond Pricing will likely need to find ways to achieve further scale worldwide before seeking direct integrations.

Final thoughts

Overall, I like many others, am a fan of Beyond Pricing. They are tackling an unmet need that creates a win for the rental property managers and the rental property websites. As a software platform, they are highly scalable, which will be important as they look to expand rapidly. One big question is will customers, who often only own one property, be willing to adopt Beyond Pricing, and at what customer acquisition cost? Ultimately, I believe that customers will adopt Beyond Pricing and I forsee this company being successful going forward.


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