Raised to Date: Raised: $1,070,000
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At the time of publication, March 27th, misterb&b had raised $520,173
Misterb&b has been selected as a “Deal To Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10%-20 of our deal diligence funnel. If you have questions regarding our deal diligence and selection methodology please reach out to email@example.com.
2019 marks a decade since the U.S. travel industry emerged from the economic recession. Over the past 10 years there has been incredible growth and recovery, allowing the travel and hospitality industry to find its turning point while being reshaped by technology.
Home sharing services are the most classic example of how the hospitality industry is being taken to a completely different level, allowing an internet-enabled version of putting up short-term space online.
Airbnb alone represents about 17% of available short-term room occupancy in cities across the world and offers more rooms than public hotel chains. Apps and services like Airbnb are revolutionizing the lodging market by keeping hotel rates in check and constantly making additional rooms available, benefiting travelers, tourism, and the global economy all at once.
However, Airbnb, as inclusive and expansive as it is, does not cater to everyone. In a recent survey done by Virgin Holidays, more than half of LGBT couples claimed they did not feel comfortable in their hotel rooms abroad and 95% of LGBTQ+ couples are uncomfortable showing affection abroad.
This is understandable, considering that in 2017, there were 72 countries that criminalized homosexuality, 19 where laws actively target public promotion or expression of same-sex and transgender realities, and 10 where homosexuality is still punishable by death.
While laws have changed in a few countries, like India with the recent overturn of Section 377, these numbers still ring true and speak to the uncertainty of safety around the world for many LGBTQ+ travelers.
In fact, a third of the community has experienced discrimination abroad, including hotels and lodging owners expressing skepticism at queer relationships and issuing separate beds or rooms for couples.
Realizing the insecurity and lack of options for LGBTQ+ travelers, misterb&b seeks to empower the queer community to feel more welcome regardless of where they go – providing them with lodging, experiences, and insider tips.
Misterb&b functions just like Airbnb, but is tailored to finding queer hosts and allies willing to share their homes with others who identify with the community as well.
While one might think that focusing on LGBTQ+ travelers searching for housing abroad is incredibly niche, a recent study by Grindr reveals the sheer size of the market.
About 40% of Grindr’s users travel four times a year and 24% plan a vacation every month. In addition to this, the queer population spends almost $100B on travel annually, 10% of their purchasing power, and a greater percentage of this community has a valid passport than the U.S. population (54% vs. 40%).
Misterb&b is already tapping into a market that loves to travel and loves to spend money on travel. Moreover, 77% of gay travelers already are in the habit of purchasing their accommodations online, making the transition to misterb&b seamless and sensible.
Even more telling is the fact that 61% of gay millennials value gay-friendly reputations of airlines and lodging places when deciding where to travel and 60% are willing to pay a premium for LGBTQ+ friendliness, proving that there is a need and desire for a company like misterb&b, with the opportunity to do incredibly well in its niche offering.
With no competitors in the market other than Wimbify, an app more focused on finding friends abroad rather than lodging with hardly enough downloads or ratings to be relevant, it is no surprise that misterb&b is steadily gaining users and fame.
Why We Like it
1. Success to date: Since its launch in 2014, misterb&b has grown to be the world’s largest gay travel lodging platform with more than 220,000 hosts across 135 countries. The numbers speak for themselves as this company has experienced 30% revenue growth YoY and has 55% share of transactions done by returning customers, speaking to their commitment to safety and community, inspiring this customer loyalty.
In June of 2018, they were the first gay app to be named App of the Day and have been recognized by CNN as “The Gay Travel Revolution”, also earning article space in Forbes, the Huffington Post, and USA Today.
2. Queer support: A lot of this company’s success is attributed to its backing and support by the queer community. Misterb&b itself has two out of three gay co-founders and received incredible support from Joel Simkhai, founder of Grindr, who was an early investor.
In addition to providing lodging for LGBTQ+ communities while traveling, misterb&b further commits themselves to their mission by donating a portion of their profits towards their “Mister for Good” initiative. On their website they display their support for five different non-profits fighting for LGBTQ+ rights, spanning their reach beyond simply shared housing.
Doing well and doing good is just good business practice.
3. On trend: Misterb&b is not the only company concerned with the gay agenda today, and many organizations are working towards creating safer spaces and greater opportunities for the queer community.
One such example is a data-driven search platform called Destination Pride. By reimagining the Pride flag as a dynamic bar graph, the world’s LGBTQ+ laws, rights, and social sentiments are able to visualize and represented to people all around the world.
Misterb&b also taps into the desire to find queer communities while travelling, featuring blog posts on the best places to travel to, different LGBTQ+ tailored events, and more.
4. Plans to expand: While misterb&b has faced some controversy and backlash as their platform is currently mainly focused on the gay, cis-gender male community, they are putting forth efforts to diversify their efforts and strive to make it known that their rooms and platform are available to all queer folk and allies.
Misterb&b also plans to expand to LGBTQ+ friendly hotels in different travel locations to enable even more options for travelers.
5. Opportunity for acquisition: There is a huge opportunity for acquisition with a platform like misterb&b. Just recently in July of 2016, Hornet, the world’s second largest gay social network, acquired Vespa, the leading gay city guide.
With this acquisition, Hornet is now able to extend its innovation lead by integrating gay places and events in 300 cities in 70 countries worldwide into its offering – why not offer lodging as well? Companies like Hornet and Grindr could definitely benefit from having a service like misterb&b on their side and this could definitely be a potential path for the company.
Airbnb is also actively acquiring companies as they aim rapid expansion and growth. Misterb&b could be a perfect fit as part of the Airbnb portfolio and provide a nice exit to investors.
6. Strong investment partners: This startup which was founded in France raised an $8.5M series A in 2017 from VC Project A and Ventech, two excellent investment partners with the express goal of expanding globally.
With strong investment partners, misterb&b has made significant strides to execute on this vision of expanding to places like the US!
Misterb&b has three co-founders, each with his own unique skillset and commitment to creating safe lodging abroad for the queer community.
Matthieu Jost (CEO) is equipped with 13+ years as an entrepreneur. Along with co-founder Marc Dedonder (CCO), with 16+ years of experience in leadership and management, they previously founded mygaytrip.com, a travel and lifestyle website for LGBTQ+ travelers.
While this website is no longer in operation, their past endeavor in similar industry with the same target group shows their relentless passion and drive to find a solution and meet this gap in the market.
Francois de Landes de Saint Palais (COO) is the third and final founder, also experienced in being a founder of a previous company and learning important skills that will help his journey with misterb&b. As a founder of Sejourning, an app for short-term rental between people in France, he reached 10,000 hosts and provides valuable insight to the current misterb&b team.
In addition to this, he also has experience at The Refiners, a cross border accelerator in San Francisco to help foreign entrepreneurs and startups go global.
Deal To Watch
Misterb&b is a Deal To Watch. In a climate where the LGBTQ+ community is constantly searching for safe and welcoming spaces, both at home and abroad, a company like misterb&b is both desired and bound for great success. With a team that not only understands and relates to the struggles of the queer community, but also has experience in founding apps and websites tailored to the queer experience and short-term rentals, their skillset is perfectly suited for the long-term growth of misterb&b.
The one thing that does concern us is the current valuation of $40M. With $2M in revenue last year, up from $1.4M the prior year we think the business is absolutely headed in the right direction. Regardless, $40M is rich and would require a $400M+ exit to achieve a 10X for investors.
For context, Airbnb just acquired HotelTonight for $400M with revenues somewhere in the $60 to $80M range. This means, misterb&b would need to multiply revenues by 30 to 40X in order to be able to achieve somewhere in the ballpark of a similar exit. We worry that this type of growth while possible may prove challenging.
Regardless, the team’s plans to stay on top of trends, expand to include more locations and more of the LGBTQ+ community, and tap into an expanding market no doubt lend the team to achieving significant growth from here. The question is what does the acquisition exit look like?
misterb&b Founder Matthieu Jost on Preventing Discrimination
LGBTQ+ travelers face the possibility of discrimination every time they take a trip, especially when going abroad. Even the well-known trip booking service, Airbnb, does not require that all hosts be LGBTQ+ friendly. There is also currently no “gay friendly” indicator available for Airbnb listings.
Matthieu Jost has experienced discrimination directly while traveling abroad. That experience inspired him to found misterb&b (a KingsCrowd Deal to Watch), which enables LGBTQ+ people to travel safely and securely. We sat down with Matthieu to talk about his vision for a global LGBTQ+ community of travelers and how misterb&b is making that vision a reality.
Note: This interview was conducted over email. It has been lightly edited for clarity and length.