The sole investors in the round was Summit Partners. Price Labs, which is already profitable, said the round is the first time it has sought outside funding, and that the cash will be used to scale its revenue management platform and expand its teams.
Based in Chicago, PriceLabs was founded in 2014 when its co-founder Richie Khandelwal found he was struggling to price his own home on Airbnb, and came to the realization that vacation rental owners were essentially left to their own devices. He ended up creating a pricing algorithm to solve his problem with friends and co-founders Anurag Verma and Sana Hassan. Since then, the algorithm has morphed into a startup and has grown to include other artificial intelligence-powered analytical tools to help managers and small businesses owners manage short-term rentals.
“With the growth-focused support and resources that Summit provides, we are excited to continue our mission of innovating the short-term rental market and accelerating our global recruitment,” Verma said in a statement.
Khandelwal explained that pricing can be the biggest growth lever when running a business. “Especially in the hospitality industry, where most businesses still use archaic methods and static pricing that can drop between 10% and 40% of revenue on the table,” he added.
PriceLabs’ algorithm relies on local data to perceive changes in demand for short-term rentals based on each market’s conditions. In this way, short-term rental property owners and managers can adjust their prices dynamically, depending on those conditions, to extract maximum revenue. PriceLabs says its prices are updated automatically via integrations with over 70 real estate management platforms.
Hassan said the company’s platform democratizes powerful tools that historically, were only available to the largest companies in the hospitality industry. “From an individual host renting their apartment seasonally in Paris, to a vacation rental manager of several thousand units in Florida, we have built a solution that is easy to use, affordable and integrates perfectly with the software they have already adopted,” he said.
Summit Partners Managing Director Colin Mistele, who joins PriceLabs’ board of directors, said he believes the company is uniquely positioned to serve a growing market with its intuitive, easily customizable and comprehensive solution that’s designed to deliver return on investment to owners and managers.
In 2021, PriceLabs notably won SaaSBoomi’s 2021 Startup of the Year award, and now does business in over 100 countries, managing some 150,000 listings globally.