Inspirato Sure Is Making CrunchFund Look Good

Luxury vacation home startup Inspirato (affiliate link, see below) has closed another round of financing – $20 million from Institutional Venture Partners, at a rumored valuation that’s significantly higher than the last round of funding closed last October.

This is a significant up round for one of our portfolio companies, and we’re proud to be part of the team.

Our investment last year wasn’t typical for CrunchFund. Most of our investments are in very early stage, often pre-launch, startups. But we’ve earmarked 20% or so of our fund for later stage investments that we see as extremely opportunistic. Inspirato, a company I’ve been tracking since it launched in February 2011, is exactly the kind of company we like to back. We appreciate Kleiner Perkins’ willingness to allow our relatively small investment in the round that they led.

It’s amazing to think of Inspirato as “later stage” when it’s less than a year old, but the company has been absolutely killing it. They take out long term leases on luxury vacation properties and then rent those properties to users at prices that are significantly lower than they can get elsewhere. You can often get a 4-5 bedroom house for about the same price as you pay for a normal room at a Four Seasons. If you’re traveling with a family or friends, it is far less expensive to use Inspirato than even more moderately priced hotels.

This model – “luxury for less” – clearly resonates with customers.

There is a membership fee for Inspirato, and a yearly fee. The company looks to those fees to provide the bulk of operating margins, which allows them to continue to offer rentals at a significantly discounted rate. Cofounder Brad Handler has referred to this as the “Costco model,” where Costco makes money off membership fees while keeping margins on retail goods extremely low.

Now about that affiliate link. As I explained in my blog post when CrunchFund first invested, Inspirato offers its members a $1,000 credit for convincing new users to join. If you sign up with my affiliate link I’ll simply transfer that credit to you. A lot of my friends have already signed up, and I’m happy to give away the credit. We’ll make it up, after all, as investors.

13 thoughts on “Inspirato Sure Is Making CrunchFund Look Good

  1. viele11 says:

    Tal vez la compre,gracias

  2. Raj says:

    Link doesn’t work

  3. This page doesn’t “inspire” a great deal of confidence in the site:

    http://www.inspirato.com/destinations/london/residences/park-studio

  4. … C’mon Mike! This is really weak… an advertisement for one of your investments? You can certainly do better than this…
    I don’t want to say that you are losing your edge, but it seems that you have become part of the “establishment.”

  5. Was that house designed after traditional Epirotic(western Greek) architecure? It’s as if the picture was taken in my village.

  6. Ryan says:

    I just signed up using your affiliate link. Site looks very promising. Some very nice rates for 4 bedrooms in Cabo. Could really save a lot of money if you get enough people to go!

  7. Michael says:

    Aren’t these the same guys who said Exclusive Resorts was the best business model. I am curiously if they will really make. I imagine they are signing up customers like weeds — the value sounds great. But my guess is that the all these customers are negative gross margin customers in the long run and if growth stalls they will be in trouble. This is exactly what happened at Exclusive Resorts. When they discovered this they raised prices and the party was over. Mike, please offer your opinion

  8. Stephen Black says:

    I’m confused at the appeal of this service, why lock yourself into a limited selection of residences when you can take the money you spend on joining fee + rental + maintenance fees and spend them on similar places on homeaway. I even found one of the Fort Lauderdale apartments listed on Inspirato listed on homeaway for the exact same price.

    There may be some bargains to be had (it’s hard to tell as a lot of the villas show ‘members only pricing’) but as Michael (above) points out whats to stop them raising the prices later on or the bargain villas being always booked up?

  9. Pretty sweet digs, to be certain.

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