Denver Emerges as Travel Tech’s Hot New Hub

On paper, Justin Miller was a man sitting where he belonged. He and his partners had sold Pillow, a San Francisco startup that handled short-term rentals sold on Airbnb and sites like VRBO, to Expedia, and Miller wanted to do something like that again. Airbnb was right there in the South of Market area, practically down the street. Easy, right?

So why is the 34-year-old sitting 1,250 miles away in Denver?

The answer, he says, is that his new venture, Showplace, will benefit from what he sees as the emergence of a small tech cluster for travel tech companies, many of which are focused on rental properties in short term, in the Rockies. The first was Exclusive Resorts LLC, now 20 years old, and probably the biggest startup is Evolve, which has raised $224.2 million in venture capital but does not publicly disclose its sales and profits. There’s AirDNA, which does business analysis for investors in short-term rental properties and was sold to a private equity firm in March, and Inspirato, a luxury vacation club that went public through the through a special purpose acquisition company, or SPAC, in February.

And now there’s Showplace, which raised $2 million in venture capital in a deal announced on June 7. The so-called seed round, the first stage of venture capital, will allow Showplace to add engineers and start building a sales team, Miller said in an interview.

“We view Denver as a travel technology hub,” Miller said. “Being in Denver gives Showplace access to industry brains to partner with and share best practices. Denver is also home to a lot of short-term rentals, so it’s a good testing ground.

Tech clusters are hard to build and good for start-ups when they happen, said Natty Zola, venture capitalist at Matchstick Ventures in Denver, who led Showplace’s investor group. They tend to promote virtuous cycles of hiring, as people with the relevant skills live close together, and the generation of ideas that result in growth and jobs.

And they are the holy grail of economic development leaders across the country. Harvard’s William Kerr and Frederic Robert-Nicoud count 25 different efforts by public officials to brand their local tech clusters as Silicon This or That, and 238 cities that bid on Amazon’s HQ2 proposal, which have all collectively harmed the supremacy of Silicon Valley. The Valley still receives 48% of US venture capital, compared to 1.1% for Denver, which sits between Miami and Austin in 9th place among US tech clusters, according to Kerr and Robert-Nicoud.

It’s not hard to imagine why cities are trying so hard. Seattle has four times as many well-paid workers in R&D-intensive industries per capita as Denver, according to the Harvard team’s 2019 paper.

Although Zola’s last job was running a business incubator in nearby Boulder, he says there was no organized effort to make Denver the Travel Tech Central. But he sees signs of workers moving between local businesses in the industry, starting with Exclusive Resorts, majority-owned by former America Online CEO Steve Case, where Evolve CEO Brian Egan has worked for seven years.

“When you have a lot of experience and success, it builds on itself,” Zola said. “You don’t have to be where the incumbents are to build a great business.”

For Miller, Denver doesn’t have to dislodge the Valley to add value to Showplace. For starters, he only has a team of 10 right now, so even a relatively small group of people with highly relevant expertise will help build his team. And it found its main investor in nearby Boulder, although Showplace is Matchstick’s first travel tech game. Zola’s own startup, before getting into coaching and investing in startups, developed tools for travel bloggers, Zola said.

Showplace’s business is all about helping new owners of short-term rentals get their properties noticed and rented out often, Miller said. He likens the process to helping home sellers “stage” their homes by choosing furniture, colors and other elements that will appeal to buyers, and photographing them in a way that grabs buyers’ attention. . Once the unit is established, he says, most owners will move on to hiring a management company to help run their unit as a permanent business.

This means using standardized design plans that Showplace develops and taking advantage of the discounts it has secured with major furniture companies. The deals allow landlords to save up to 80% off the price of an Airbnb-friendly design, Miller said.

Like the interior designers it hopes to replace, Showplace will take design fees that vary depending on the size and design of the home, as well as a portion of the savings offered by furniture vendors and other sellers.

“We help get a property on board in half the time and help the owner save money,” Miller said. “Most of the owners are new to the business.”

The goal is to act quickly, acquiring 100,000 new Airbnb and similar units as customers within 18 months, or about 10% of the million units per year, he expects Airbnb alone to add. Software-driven design patterns will help the business scale, he said. With valuations in its sub-sector as high as 30 times earnings in some cases, he says Showplace can become a billion dollar company within a few years.

To do all of this, Miller will need help. He hopes – and bets – that he can get some of it from his new neighbors, like a digital sugar cup traded over the back fence.

Here’s more of what Skift has to say about Travel Tech Hubs

Why Barcelona is becoming a hub for travel startups : A new study highlights Barcelona’s recent growth as a hub for travel startups. A rich tourist history, a sunny location and a favorable cost of living. The land is certainly attractive.

Brazil’s travel tech scene is booming despite the pandemic : Brazil encourages dozens of travel technology companies. Developing a local digital influence could help the country resist incursions from foreign heavyweights as it looks to a post-pandemic recovery.

6 French travel startups are thriving despite the pandemic : Travel bookings will get worse before they get better. But we found half a dozen French travel startups that defied the odds. They seem to be preparing well for the post-crisis rebound. Good luck!

Can Scotland create a regional travel tech hub for a post-coronavirus world? : Countries are missing a playbook to deal with the effect of the pandemic on tourism, but Scotland is one to watch when it comes to its new push to boost its travel tech sector.

About Jermaine Chase

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