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Emerald Stay

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The proptech that acquires and grows vacation rental operators.

144%
 - 
Funded 2 Mar 2022
€500,000 target
€734,430 from 219 investors
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Business overview

Location Genève, Switzerland
Social media
Website emeraldstay.com
Sectors Property Mixed Digital/Non-Digital Mixed B2B/B2C
Company number CHE-420.659.492
Incorporation date 30 May 2017
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Investment summary

Type Convertible
Discount 20%
Share price N/A
Tax relief N/A
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Business highlights

  • Monthly revenue +240% in December and +600% in January*
  • Cash profitable since November 2021*
  • 4 acquisitions under LOI
  • Funding round alongside €3m credit facility from German VC
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Key features

  • Secondary Market
  • Seedrs nominee min. €10.00 +
  • Idea
  • Key Information
  • Team
  • Updates
  • Investors 219
  • Discussion
  • Documents

Learn more about convertible campaigns.

Idea

Introduction

We’re the proptech that has been managing premium vacation rentals since 2018 in 7+ leisure destinations, both online and on-the-ground.

Our technology improves guest experience and optimises operations, from cleaning to dynamic pricing on 3rd party channels such as Airbnb.

It's called Smart Ownership®.

This earned us the 2021 award for “Best Leisure Property Manager”, ahead of US scale ups with hundreds of millions in funding.

🚀 Enter acquisitive growth 🚀

There are 140'000 rental operators globally, 90% of which manage less than 100 homes. Many of them have great contracts with homeowners, but lack resources to operate optimally.

We acquire such operators and integrate them into our technology and operations. We target an increase in their earnings of between 40-70%.

Through each acquisition of €1m, we aim to add between €8m and €10m to our group valuation.

Over the past 6 months, we've built a pipeline of 81 qualified targets and engaged 21.

We are executing our first 4 acquisitions.

Substantial accomplishments to date

2018

🚀 Launched in our first winter destination in the French Alps

👩🏻‍💻 Developed our proprietary API connecting to multiple third-party and in-house apps

💶 Raised a €180K angel round

2019

Team relocates from Geneva to Barcelona

👩🏻‍💻 Launched our booking engine and proprietary automated pricing model

💶 Raised a €600K pre-seed round

2020

🚀 Launched in 2 new destinations in the French Alps

👩🏻‍💻 Developed the owner’s app where owners can see bookings, earnings and reviews

2021

🏡 Doubled portfolio during Covid-19 striken year

🏆 Awarded "Best Leisure Property Manager" at the Shortyz awards

🏆 Awarded Airbnb Superhost status for fourth consecutive year

🏅 Became official Marriott Homes & Villas partner, offering the opportunity for 120 million Bonvoy® members to use/collect points when booking with us.

📈 Reached cash profitability in November 2021

💶 Raised €1.2m seed round, including on Seedrs

2022

📈 Reached monthly revenue of €777k in February, +494% year on year

📊 Grew direct bookings by 100% year on year

❤️ Reached 1'000 reviews with average 4.8/5

🖋 Signed letter of interest for our first 4 acquisitions

Monetisation strategy

OPERATIONS

We make money by cashing in the margin from operating the homes:

1. Revenue: what guests pay us for their stays in our homes

2. Operating costs:

- the revenue-share paid to the owner of the property, minus direct operations costs (- 65-75%)

+ the fees cashed in on extra services provided (+5%)

= Contribution margin: 30%-40% of revenue

ACQUISITIONS

A. We earn the difference between the pre-integration margin of the businesses we acquire and their post-integration margin. We target an increase of 40-70% attributable to optimised distribution, operations automation, economies of scale, and head office synergies.

B. In addition, we earn the "multiple arbitrage", i.e. the difference between the margin multiple we acquire the business at and what our consolidated group is valued at given its larger scale.

Use of proceeds

The proceeds are intended to be used to acquire 4 rental operators that are already under letter of interest with us. The destination of operations are in the Balearics, Costa Brava and South of France.

The acquisitions will be financed 40% by equity and 60% by debt financing provided by our lead investor as part of a structured credit facility.

Given that our existing group is profitable*, we do not need to spend on our overheads for our existing operations.

However a minor part of proceeds (150'000 EUR) will go towards growing our mergers & acquisitions team and our integration team, so that we can prepare PHASE 2 of our acquisitions pipeline.

*Based on unaudited management accounts

Key Information

Advance Subscription Agreement - Key Terms

This investment round is being raised by way of a convertible equity investment structure, in this case, an 'Advanced Subscription Agreement'.

The key terms that apply to the Company’s advanced subscription agreement are set out below. See also attached Key Terms document for further details.

Discount – 20%

Valuation cap and default valuation - EUR 18,000,000.

Conversion is triggered by:

(1) An Equity Fundraise – defined as the Company raising investment capital of at least EUR 2,000,000 from one transaction or a series of transactions, in exchange for the company issuing equity shares;

(2) A Change of Control of the company (transfer of more than 50% of the share capital) or IPO

(3) Longstop Date -12 months from the date of the Advance Subscription Agreement.

(4) Winding up event.

On conversion upon an Equity Fundraise, Change of Control or IPO, the convertible will convert into the highest class of shares at the lower of (i) a 20% discount to the price of the relevant trigger event and (ii) the price a share would be if the pre-money valuation was equal to the Valuation cap.

On conversion at the Longstop Date or on a winding-up event, the convertible will convert into the highest class of shares at the lower of:

(i) the lowest price of any shares issued after the advance subscription agreement is signed; and
(ii) the price a share would be if the pre-money valuation was equal to the Valuation cap.

Debt

The company has been granted a covid-19 relief loan totalling EUR 294,215, which starts amortising in Q3 2022 over 5 years. This loan carries a fixed interest rate between 0% and 0.25%.

The company received a EUR 3M debt facility in Feb 2022 that accrues 11% interest over the first 9 months and matures in Feb 2025. This loan also has a warrant for €300k of shares at this round's valuation.

None of the funds raised will be used to repay these loans.

Outstanding convertible

The company has previously raised EUR1.25m through convertible loans which may convert to equity after this round and dilute existing shareholders. The terms for this can be found on the company's previous Seedrs campaign - https://www.seedrs.com/emerald-stay/sections/ke...

Share classes

The company currently has only one class of shares, ordinary shares, but has contractually agreed 1x non-participating preference rights for certain existing investors. On an exit or liquidation, these investors will receive the higher of (i) proceeds equal to their initial investment and (ii) their pro rata share of proceeds based on shareholding, before proceeds are distributed to all other shareholders.

On conversion of the convertibles issued in this round, the company intends to formalise this preference and create a class of preference shares with a 1x non-participating preference. Investors in this round will be issued the highest class of shares on conversion.

Phantom shares

The Company has a phantom share plan of 5.21% of the equity of the company. This is intended to be granted to its employees, directors and consultants, for them to be compensated for their contribution to the long-term growth and profits of the Company. These shares entitle their beneficiaries to conversion proceeds in cash, without the possibilities to convert them in common shares of the Company nor receive dividends.

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If you successfully purchase a share lot of this business, you will be granted access.

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If you successfully purchase a share lot of this business, you will be granted access.

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If you successfully purchase a share lot of this business, you will be granted access.

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Investing involves risks, including loss of capital, illiquidity, lack of dividends and dilution, and should be done only as part of a diversified portfolio. Please read the Risk Warnings before investing. Investments should only be made by investors who understand these risks. Tax treatment depends on individual circumstances and is subject to change in future.

This webpage has been approved as a financial promotion by Seedrs Limited ("Seedrs"), which is authorised and regulated by the Financial Conduct Authority. It is not intended to be a promotion of any individual investment opportunity and is not an offer to the public. The summary information provided about investment opportunities on this webpage is intended solely to demonstrate the types of investments available on the Seedrs platform, and any investment decision should be made on the basis of the full campaign. Full campaigns are available to investors who have become authorised to invest on the Seedrs platform. All investment activities take place within the United Kingdom, and any person resident outside the United Kingdom should ensure that they are not subject to any local regulations before investing.

Seedrs does not make investment recommendations to you. No communications from Seedrs, through this website or any other medium, should be construed as an investment recommendation. Further, nothing on this website shall be considered an offer to sell, or a solicitation of an offer to buy, any security to any person in any jurisdiction to whom or in which such offer, solicitation or sale is unlawful. Seedrs does not provide legal, financial or tax advice of any kind. If you have any questions with respect to legal, financial or tax matters relevant to your interactions with Seedrs, you should consult a professional adviser.

Tax Relief (SEIS)

This business is eligible for SEIS relief - providing qualifying investors with income tax relief of 50% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Tax Relief (EIS)

This business is eligible for EIS relief - providing qualifying investors with income tax relief of 30% of their investment and certain other tax reliefs. Tax treatment depends on individual circumstances and is subject to change in future. Click to learn more.

Valuation (pre-money)

Valuation rounded from Convertible

This is the fully-diluted pre-money valuation of the business (i.e. before the new investment comes in and including issued options and other equity interests). In contrast, the post-money valuation is based on inclusion of the new investment in the value.

It is calculated as the pre-money valuation plus the amount of new investment. e.g. If Company A is ascribed a pre-money valuation of £1,200,000 by prospective investors investing £300,000, its post-money valuation is £1,500,000.

Pitch type

There are 5 types of investment pitch available on Seedrs.

  • Equity
  • Convertible
  • Fund
  • Cohort
  • Secondary

Investing in a convertible campaign allows you to invest today, with your investment converting into equity in the future, at a discount compared to other investors.

Learn more about pitch type on Seedrs

Equity Offered

The equity offered is the percentage of the company’s shares being issued in return for the amount of investment raised.

When the amount raised is less than 100%, the equity offered is based on the target raise. Once the company has raised over 100% it is based on the total raised.

In some scenarios, entrepreneurs may accept additional direct investment after closing their Seedrs campaign. Provided this is within 6 months of the closing and on the same terms, we do not typically offer pre-emption rights on that extra investment (where you have the opportunity to invest again to maintain your percentage shareholding).

Learn more about investing and pre-emption rights.

Seedrs nominee

This shows if you are able to choose, when making an investment, that you be represented by, and your shareholding be managed by, the Seedrs nominee.

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Custodian

If you invest in this Campaign, Seedrs will act as Custodian rather than provide our standard nominee service. This is due to the fact that the business is not directly involved in the share sale and Seedrs will not benefit from any rights under a shareholder agreement. As a result, Seedrs will handle administrative tasks as we do normally, but you will not have information or voting rights, updates from the business, preemption on future fundraising, or ongoing support about business trading activity.

Learn more about Custodian here

Secondary market

This shows if the business has opted-in or opted-out of allowing its shares to be bought and sold on the secondary market.

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Direct investment

This is an option to invest and hold shares 'directly' in the company (rather than via the Seedrs Nominee). This option is only available to those investing over the threshold amount, which is determined by the fundraising company.

If you choose to hold your shares directly, you will be responsible for any contractual or administrative arrangements with the company you are investing in.

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Payment options

We are not able to accept card payments for investments into this sector. You can pay for your investment by creating a bank transfer, using funds in your investment account or create a Pay by Bank payment. Your investment will only be completed once the funds have reached our account.

Business Involvement

This Campaign offers shares for sale in business that is not directly involved in this Campaign or the sale. As a result, the Campaign and post-investment experience, including investor rights, will differ from a business-led campaign on Seedrs. Most notably, the business will not engage with investors in the discussion forums both during and after the sale or provide any updates to investors.

Learn more here

Payment options

We are not able to accept Pay by Bank payments for investments into this sector. You can pay for your investment with a card payment, by creating a bank transfer or by using funds in your investment account. Your investment will only be completed once the funds have reached our account.

Drawdowns

This campaign offers the ability to pay for an investment by drawdowns.

Warning

You are following a link outside of www.seedrs.com.

None of the information in constitutes part of the campaign and it has not been approved or reviewed by Seedrs.

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