Germany: Vacation rental distribution channel and metasearch engine, HomeToGo, has announced that it is entered into a definitive agreement to merge with publicly listed special purpose acquisition company Lakestar SPAC I in a €1.2 billion [$1.41 billion] transaction.
Under the terms of the transaction which is expected to close in the third quarter of 2021, the combined company – HomeToGo – would reach an enterprise value of €861 million [$1.01 billion]. The combined company will be listed on the Frankfurt Stock Exchange under the ticker “HTG”, but until then, Lakestar SPAC I will continue to trade under the ticker “LRS1”.
European venture fund Lakestar joins other investors and family offices specialising in tech investments and tech entrepreneurs in committing €75 million [$88 million] in private investment in public equity. Lakestar SPAC I investors and founders are expected to retain a 25 per cent stake in the combined company.
When it goes public, HomeToGo’s management board will largely continue under its current guise, consisting of Dr. Patrick Andrae [HomeToGo co-founder and CEO], co-founder and chief strategy officer, Wolfgang Heigl, newly-appointed COO Valentin Gruber, and CFO Steffen Schneider. Martin Reiter, VP Europe at Wayfair, who previously built Airbnb’s global presence while leading its international operations, will join HomeToGo’s supervisory board and invest in the combined company.
Andrae said: “Joining forces with Lakestar SPAC I to bring HomeToGo to the public markets presents a great opportunity to fuel the next level of growth. High quality, multi-purpose and unique vacation rentals are the new zeitgeist, and this trend has drastically accelerated over the last year.
“With millions of offers and thousands of partners in one comprehensive marketplace, HomeToGo already has the largest selection of alternative accommodation and is perfectly positioned to make incredible homes easily accessible to everyone.
“The Lakestar SPAC I team has significant experience in assisting tech companies like ours and will be a valued strategic partner, especially as we grow our tech-enabled supply and demand services for our trusted supply partners. I would like to personally thank all those involved in making this combination a success, including new and existing investors, and especially our outstanding HomeToGo team,” he added.
Founded in 2014, HomeToGo achieved a record gross booking value of €904 million [$1.069 billion] in the first half of 2021, up 27 per cent year-on-year, despite the impact of the Covid-19 pandemic.
The startup, which has yet to make a profit, has benefited from the boom in domestic travel and surging interest in alternative accommodation, including vacation rentals, over the past year. Furthermore, the push for more remote working and so-called ‘workations’ is set to bring new long-term demand to the market by presenting vacation rentals as a more sustainable choice in terms of travelling shorter distances.
Lakestar SPAC I CEO Stefan Winners said: “At Lakestar SPAC I, we were particularly interested in partnering with an innovative company in European tech with substantial long-term growth potential such as HomeToGo. HomeToGo is led by an accomplished management team and has proven to be resilient, growing and developing strongly despite the global pandemic.”
Inga Schwarting, CIO of Lakestar SPAC I, said: “By investing in Berlin-based travel tech firm HomeToGo, we are excited to create a publicly listed combined company focusing on a next generation marketplace on alternative accommodation. HomeToGo demonstrates significant growth prospects and meets all criteria of the Lakestar SPAC I target profile as the first tech-focused SPAC in Europe.”
Dr. Klaus Hommels, sponsor and chairman of the supervisory board of Lakestar SPAC I, said: “The European technology sector offers attractive investment opportunities with promising valuations and many excellent growth companies. However, European tech companies do not have the same access to capital as companies in the US or Asia.
“There is a considerable need for action in Europe to provide young, innovative companies – especially in the growth phase – with the necessary capital. This first entirely European tech SPAC deal is an important signal towards European innovators looking for European capital.”
HomeToGo aims to use the proceeds of the transaction to drive organic growth and make potential acquisitions that would enhance its service offering and help the startup achieve profitability within the next two years.
With more than 30,000 partners using its platform, HomeToGo combines the most comprehensive inventory of more than 14 million accommodation offers in one place in order to help its users find the ideal home for any trip. Its technology platform is designed to remove friction for both supply and demand, better connect online travel agencies, property managers and other supply partners with qualified, conversion-optimised consumer demand.
HomeToGo becomes the latest company to explore going public via a SPAC merger, as some startups consider it to be a more time-efficient and less risky route to the public markets than a traditional initial public offering [IPO] through the banks.
Last year, it emerged that Airbnb was approached about a potential merger with a SPAC led by billionaire Bill Ackman before going public via an IPO in December. This year, short-term lodging company Sonder will go public via a SPAC merger at a $2.2 billion valuation and private travel club Inspirato is set to go public in a $1.1 billion SPAC merger with Thayer Ventures.
