Safe Global Travel for LGBTQ Travelers with misterb&b

Key Stats:

Summary

The misterb&b team has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to hello@kingscrowd.com.

Problem

Gay, lesbian, bisexexual, transgender, and queer people have long faced traumatizing and sometimes violent discrimination based simply on who they love. There are 72 countries around the world where homosexuality is illegal. Even though same-sex marriage was declared constitutionally legal in the U.S. in 2015, one in four LGBTQ people reported being discriminated against in 2016. 

Many of the day-to-day activities that heterosexual people take for granted are more difficult for LGBTQ individuals due to microaggressions or even outright discrimination. Travel can be particularly fraught for the LGBTQ community, as it is difficult to know how a local community treats LGBTQ visitors (particularly abroad). A report by the World Tourism Organization found that 32% of LGBTQ travelers feel that they are treated differently on vacation. 

Given the scale of LGBTQ discrimination during travel, LGBTQ people are sometimes rightly concerned with booking arrangements via the same methods that heterosexual people use. Even as recently as 2016, Airbnb did not explicitly bar hosts from discriminating against guests based on their sexual orientation or gender identity. After an incident of LGBTQ discrimination, activists called on Airbnb to implement a “gay-friendly” indicator for listings. 

At this time, Airbnb still does not indicate whether listings are gay friendly. Rather, it is up to the individual who owns the property to say whether their retreat is LGBTQ friendly. Many LGBTQ travelers, therefore, seek another method to book travel accommodations that explicitly accept all types of guests. LGBTQ individuals have a right to feel safe travelling worldwide. 

Solution

misterb&b is essentially an LGBTQ version of Airbnb. Hosts, whether LGBTQ themselves or straight allies, can list accommodations and set nightly rates. LGBTQ travelers can browse listings and pick a place to stay, secure in the explicit promise that misterb&b hosts are welcoming to LGBTQ guests. 

Beyond Airbnb-style hosted listings, misterb&b has also expanded to include hotel room stays in partnership with hotels around the world. misterb&b also provides more than just accomodations to LGBTQ travelers. Users can connect with other travelers staying in the same communities to explore the world together. They can also browse extensive travel content catered to the LGBTQ travel experience. 

misterb&b was founded more than five years ago and has received significant interest from U.S. investors. The company raised a $2M seed round in 2015. It was later accepted into the 500 Startups accelerator. On 500 Startups Demo Day, misterb&b received an investment from 500 startups and exited the program with $2.5 million more runway to scale the company. 

In 2017, misterb&b raised an $8.5 million Series A round to scale marketing, technology, and hiring. Apple later featured misterb&b as App Store App of the Day during June 2018 in honor of Pride month and did so again in 2019. Later that year, misterb&b raised raised a $1 million crowdfunded round on WeFunder. 

misterb&b booked $15 million in transaction volume in 2019, generating just over $2.8 million in revenue. The company operated at a loss of $2.1 million. 

The Team

misterb&b CEO Matthieu Jost understands the needs of the gay traveler. He founded miserb&b after he and his partner experienced discrimination from a short-term rental host. He then resolved to create a safe space for LGBTQ individuals to travel worldwide. He was well-qualified for the challenge: Jost previously co-founded and served as COO for mygaytrip.com, a LGBTQ travel brand in France. Before venturing into the travel industry, Jost worked in marketing and sales in Europe. He previously founded a media company that sold for a profit to France’s Allocine. misterb&b Chief Content Officer Marc Dedonder worked with Jost on mygaytrip.com. 

COO Francois de Landes de Saint Palais is similarly experienced in travel. He co-founded and served as the COO for Sejourning, a short-term travel rental website based in France. Before Sejourning, he founded various finance and credit companies in Europe. misterb&b CMO Anissa Truchet has many years of experience in marketing, with some experience in travel. Finally, misterb&b CTO Anthony Bazhuhin lends over 15 years of experience as a Ruby on Rails lead. 

Growth Plan

Before coronavirus hit, misterb&b planned to hit $30 million in transaction volume for 2020. This 2x growth from 2019 was driven by misterb&b’s new hotel offering, which allows travelers to select hotel rooms for rent rather than host listings. Now, of course, misterb&b’s projections are significantly impacted by the global travel lockdown. 

The company is stingy on the details of future growth plans. However, it says that this WeFunder round will be used to adapt to COVID-19 with new tech tools for hosts and guests to manage the new travel normal after coronavirus. Additional funds will be used for a new marketing kickoff to promote the service again when the world reopens. 

misterb&b reportedly planned to achieve profitability in 2020 before coronavirus, and now believes that it is on track to do so in 2021.

Why We Like it

• Proven, venture-backed business: misterb&b has gained significant traction since it was founded. It has clearly proven that LGBTQ travelers are receptive to an explicitly-LGBTQ travel booking platform. The company has raised over $10 million in venture capital investment and booked over $15 million in transaction volume last year. With over 1 million listings in 200 countries, misterb&b has created a sizeable and entrenched marketplace for gay-friendly travel.

• Founding team with extensive experience in travel: misterb&b’s Founder and CEO, Matthieu Jost, previously co-founded and served as COO for a similar LGBTQ travel concept called mygaytrip.com. The site grew to become the largest gay trip advisor in Europe. COO Francois de Landes de Saint Palais served as the co-founder and COO for Sejourning, a short-term rental website in France. This expertise is invaluable in scaling a similar company focused on LGBTQ travel and short-term rentals.

Rating

misterb&b is solving an important problem in a huge global travel market. Travelers in 2020 should not worry about facing discrimination when they travel abroad. LGBTQ individuals also deserve a venue to connect with other travelers and experience vacationing through the lens of their community’s unique experience. misterb&b users have proven that the need for this service exists with $15 million of transactions booked in 2019. 

However, prospective investors should carefully consider two key risks of investing in misterb&b. First, COVID-19 has paralyzed the travel industry, and no one knows for sure when we will be able to travel again. It may be upwards of a year before misterb&b returns to normal transaction volume. Given the company’s substantial burn rate, misterb&b may not have the runway to sustain the business until coronavirus subsides (though it has reduced expenses by four times in the last several months). 

Secondly, misterb&b has received significant venture capital backing, but has relatively little revenue to show for such substantial invested capital. The company has raised over $10 million over five years. While almost $3 million in annual revenue is a major milestone for most small businesses, misterb&b has grown relatively slowly given the time and capital expended. 

If misterb&b and the travel industry at large can recover from the massive toll of the global coronavirus pandemic, misterb&b is relatively well-positioned for exit. It is somewhat unlikely that the company will achieve unicorn status or a large IPO, given the niche market that it serves. It is more likely that big travel players like Airbnb or Expedia Group will consider acquiring companies that offer similar services to a niche market. Airbnb could snap up companies like misterb&b, Noirbnb (Airbnb for people of color), and other similar concepts to create an umbrella brand catering to individuals from all walks of life. Airbnb has acquired many competitors or adjacent companies. It may continue to consider diversified streams of revenue as it lines up for IPO.

Like many companies founded by a member of the target audience, misterb&b has clearly succeeded at helping LGBTQ individuals travel more safely and comfortably. While investors should think carefully about investing in a young travel company during the pandemic, misterb&b’s proven traction and experienced team provide strong signals for future growth. Therefore, misterb&b is a Deal to Watch.