This week vacation rental listing site Vacayrx launched a crowdfunding campaign and plans to use the funds to promote an initial coin offering (ICO) later this year to build a blockchain-based platform.
Jesse Martinek founded the Jackson, Wyoming-based company about a year and a half ago after working in business development positions at Turnkey Vacation Rentals and Vacasa. There he saw changes coming to OTAs that would hurt property managers, such as the removal of guest phone numbers, instant bookings, and increased fees. He built Vacayrx as a different option for property managers.
Vacayrx charges a $25 flat booking fee to guests in addition to a subscription fee starting at $50 per month per property. The site now has 3,400 active listings throughout the US, Canada, Europe, and Australia, and Martinek is eyeing future growth through blockchain.
According to Martinek, “[The ICO] will allow us to build a blockchain-based platform which will offer the best of both worlds (pre-booking communication and instant booking potential).”
In an ICO, a company creates digital tokens, or coins, on a platform like Ethereum, then sells those tokens to investors. Investors purchase the coins with a digital currency like bitcoin or ether. Unlike a public offering, investors do not own part of the company itself but rather fund a future product for which the coins can be traded. In this case, the funds will be used to build a platform on which the coins could be traded for vacation rental reservations.
“We have elected to go the crowdfunding/ICO route rather than VC due to shifting regulations which make ICOs more accessible, and because VCs have continued to struggle with the nuances of our industry,” Martinek said.
Blockchain is a digital ledger of transactions that is stored across a peer-to-peer network of computers. The technology allows users to trade directly with each other with the transaction verified and executed by the network, rather than through a bank, hosting platform, or other intermediary.
“By introducing the blockchain to the industry, we can eliminate service fees from both sides of the transaction which effectively breaks the business model of the large OTAs,” Martinek added.
The crowdfunding campaign is running on TheLocalCrowd.com and ends September 1.