HomeAway Raises $250 Million–Biggest Internet Deal Since 2000

Last night, I published a story about the biggest Internet deal since 2000–a $250 million investment in Austin-based online vacation rental roll-up HomeAway Inc.

Here’s a snippet:
“This thing is a very well-kept secret,” says Todd Chaffee, general partner with Institutional Venture Partners, a VC firm that ponied up $45 million in the investment round, announced Nov. 11. The rest of the financing came from Technology Crossover Ventures and Redpoint Ventures. Previous investors include Trident Capital and Austin Ventures, which remains the largest shareholder of the company. “It’s time to unveil it and turn this thing into the next eBay or Expedia or very high-profile Internet company,” says Chaffee, who led his firm’s investments in Yahoo!, Netflix and Verisign.

Read the rest of the story here.

The New York Times Bits blog reports that HomeAway is profitable. But that is not true, according to what CEO Brian Sharples told me. He said the company is producing an operating profit and is cash flow positive but is not generating net income according to generally accepted accounting principle due to the large amount of amortization costs it has incurred from acquiring so many companies.

Also, TechCrunch reports that the “pre-money valuation was around $1.15 billion” and that
“since HomeAway has acquired just about everyone in the market, there’s little room for additional growth via acquisitions.”

I haven’t heard what the valuation of the company was but I don’t agree that there’s little room for M&A. Fact is, the online vacation rental market still remains highly fragmented. And while HomeAway has bought up the top five U.S. properties, they have a lot more room to grow globally. CEO Sharples says it will use part of the investment to buy up sites in South America, Canada, Asia and Eastern Europe. Already, he says 40% of the company’s revenue comes from overseas. I suspect that will climb above 50% in the next year or two.

“Travel is a worldwide business,” he says. “To lead this category we have to make sure we homes all over the world and travellers from all over the world.”

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Tags: Austin Ventures, Brian Sharples, HomeAway, Institutional Venture Partners, Technology Crossover Ventures, Todd Chaffee, Trident Capital