Luxury Vacation Home Ownership Platform Seeks Fresh Funds Amid Market Challenges
Pacaso, a pioneering company that offers fractional ownership in high-end vacation homes, is turning to individual investors to raise capital as it navigates a turbulent real estate landscape. Founded by former Zillow executives Austin Allison and Spencer Rascoff in 2020, Pacaso promises a more accessible and affordable way to own a luxury getaway.
The company acquires properties in sought-after destinations, furnishes them, and resells stakes to individuals who can purchase between 12.5% and 50% ownership. In return, owners can enjoy the property for an equivalent percentage of the year. Pacaso emphasizes that its model differs from traditional timeshares, as buyers own actual real estate and can sell their shares for potential gains.
Recent financial disclosures reveal the company’s struggles, with revenue plummeting 59% between 2022 and 2023 due to reduced marketing spending and slower sales. Pacaso lost $36 million last year and nearly $82 million the previous year. The company attributes the decline to macroeconomic factors, including rising interest rates and inflation, which have led to consumer uncertainty in the real estate market.
To adapt, Pacaso is seeking to raise up to $75 million through a public offering, allowing individuals to invest alongside top venture capital firms and angel investors. The minimum investment is set at $1,000, making it more accessible to a broader audience. The company plans to use the proceeds to fuel growth and expansion.
Pacaso’s luxury properties cater to a niche market of high-net-worth individuals, with an average household income exceeding $1 million and a net worth of over $5 million. The company touts its appeal to couples and families seeking high-end vacation experiences.
However, investing in Pacaso comes with risks, including the lack of an established market for its stock and the possibility of holding onto shares indefinitely. Industry experts caution that investing in early-stage startups like Pacaso requires careful consideration and a willingness to take on risk. As one investment adviser notes, “Speculation is at the far end of the risk spectrum, and here the expectation is less about return but more about a chance to hit big.”
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