Expedia acquires two short-term rental startups to take on Airbnb

Online travel booking firm Expedia is muscling into Airbnb territory with the acquisition of two companies that also help to facilitate short term rentals in private properties.

The company, which already owns similar short-term rental firms such as HomeAway and VRBO, said it’s acquiring both Pillow and ApartmentJet, for undisclosed fees. Expedia said that the acquisitions will allow HomeAway to add a broader selection of accommodations to its marketplace and marketplaces across Expedia Group brands.

Employees of both companies will join Expedia’s team, the company said.

“Demand for short-term rentals in US urban destinations has been growing impressively over the last several years,” said Mark Okerstrom, president and CEO of Expedia Group, in a statement. “In order to deliver to our customers what they are asking for while at the same time promoting responsible renting, Expedia Group is committed to delivering solutions that give urban building owners, managers and communities control and transparency over short-term rentals. Our acquisitions of Pillow and ApartmentJet are important and foundational invetments in the Expedia Group platform.”

Expedia paid $3.9 billion to buy HomeAway and its portfolio of travel brands when it acquired it back in 2015. That was its first move into the alternative accommodations space, and the start of its effort to take on Airbnb, which is still the world’s biggest short-term rental company. However, Expedia’s newest buys also come with software tools for property managers that can be used to manage portfolios of short term rental properties on both the HomeAway and VRBO platforms.

San Francisco-based Pillow helps residents list their apartments as short-term rentals without violating their leases. The company has raised $16.5 million in venture capital funding, including a $13.5 million round last year led by Mayfield, with participation from Sterling.VC, Peak Capital Partners, Expansion VC, Chris Anderson, Gary Vaynerchuk, Dennis Phelps and Veritas Investments.

As for ApartmentJet, this Chicago-based company helps property owners make money from vacancies, and had previously raised $1.2 million in funding from Network Ventures and BlueTree.