Hand-picked places to stay for the discerning traveler: our investment in The Plum Guide
By Megumi Ikeda, Hearst Ventures.
March 21, 2019
We’ve all done it. Counting the days until that longed-for vacation, picturing the just-plumped pillow on the luxurious bed and the perfect balcony over that cute city square. And then the doubts creep in. Is the cool up-and-coming area where you’ve booked your pad for the week actually a suburb with a crime problem? Is the eclectic and homely lounge where you plan to host friends really just a worn-out room, full of mismatched furniture, that has seen better days?
Urban breaks in alternative accommodation are the way that travelers want to experience the world now. Airbnb has more rooms than any hotel operator. Travel is a huge and growing sector that Hearst Ventures has been looking at for a while. But how do you enter a market that has already been disrupted and in which $1 in every $5 spent on accommodation goes to the San Francisco company?
When we came across The Plum Guide, the answer became clear. The alternative accommodation market that has developed has a huge flaw. Since it relies solely on customer reviews, guests have to take far too much on trust. The Plum Guide, in which we have just invested at Series B alongside Talis Capital, Latitude and Octopus Ventures, addresses the traveler who wants a professionally-curated list of the best places to stay in a given area, before they commit. We understand why this matters to consumers. When Good Housekeeping, one of Hearst’s flagship magazines, awards its Seal of Approval to a household item, sales rocket. People want to know what experts think. Professional opinions count for a lot — whether choosing a washing machine, a car or a two-bed apartment in LA.
Just 1 in a 100 homes in a city is invited to become a Plum Guide property. The process starts with a telephone interview between the host and Plum that establishes the hosts suitability to provide a top-class product. Then, a home critic visits the property and checks facilities against rigorous criteria — everything from the shower head pressure to the WiFi speed to the aesthetics of the home. This attention to detail should never be underestimated, especially in this market. And this is where The Plum Guide really has blown us away.
As investors, we often speak about product/ market fit. With The Plum Guide, we have seen a spectacular product/CEO fit. Doron Meyassed is of Israeli-descent but grew up around the globe and speaks four languages fluently. Inspired by a home rental in Tel Aviv, Doron launched The Plum Guide as his second startup. His first company, Promise Communities, which sold to Omnicom, built communities around marquee brands such as Sony, British Airways and Samsung to launch new products. Doron’s personal experiences, prior startup and discerning eye make him the perfect CEO to launch The Plum Guide.
That The Plum Guide resonates with travelers can be seen in its impressive month-on-month revenue growth during 2018 and strong unit economics. It already has an affluent active user base of 47,000 travelers, attracting both the boomers with significant wealth and professional millennials who have come to age with Airbnb but are tired of disappointing rentals and wants someone to do the legwork for finding the best homes and hosts for them.
As more cities and more accommodation are added to the platform, the economies of scale get better. The Series B funding will enable the Plum Guide to open in 12 new locations in 2019, on top of London, Paris, Rome, Milan, Los Angeles and New York.
