Wander's Journey: From Owned Properties to Managed Marketplace

The Evolution of Wander's Business Model

Wander, the vacation rental platform, has undergone a significant transformation since its inception. CEO John Andrew recently sat down to discuss the company's journey from owning properties to becoming a managed marketplace, as well as their latest funding round and future plans.

The Initial Concept

When Wander first launched, the company's core idea was to solve a common problem: too many people were having bad vacation rental experiences. Travelers would book accommodations only to find that the property didn't match the photos, the beds were uncomfortable, or the internet was unreliable. To address these issues, Wander initially took a vertically integrated approach, going as far as owning the homes themselves.

Pivoting to a Managed Marketplace

As the company grew, it became clear that owning properties wasn't the most scalable solution. John Andrew explains:

"We obviously started with this core idea of too many people having a bad vacation rental experience. The question was, how far down do you go? Do you go all the way to the actual ownership level to deliver this underlying experience? That's what we did to start with, obviously, by actually owning the homes."

However, the company soon realized that they could achieve their quality standards without owning the properties outright. This led to a pivot towards a managed marketplace model, where Wander partners with high-end homeowners to offer their properties on the platform.

The REIT Experiment

Before settling on the current model, Wander experimented with creating a Real Estate Investment Trust (REIT) to move properties off their balance sheet and allow for investor-owned assets. John Andrew describes the process:

"Standing up a REIT is insane in a good way. If you think about what's required just to set up a VC fund, let alone a fully certified private REIT that can scale to billions of dollars from really incredible partners as well. It was a lot as a startup."

However, changes in the macroeconomic environment, including rising interest rates, led the company to reconsider this approach.

The Power of Software: Wander OS

A key factor in Wander's ability to maintain high-quality standards without owning properties is their proprietary software, Wander OS. This comprehensive property management system coordinates everything from vendor management and guest communication to intelligent pricing and task management.

John Andrew emphasizes the importance of this technology:

"As that scaled, by the time we hit year three, it was actually pretty strong. It was able to orchestrate vendors 100% through the software. We didn't have any local property managers; everything was just third-party vendors orchestrated through this software."

Maintaining Quality in a Managed Marketplace

One of the biggest challenges in transitioning to a managed marketplace was ensuring that the high standards Wander had established could be maintained across third-party inventory. The company has implemented several checks and balances to achieve this:

• Cleaning crews go through a detailed checklist and upload photos and videos
• Agents analyze the uploaded content
• Property inspectors conduct additional checks

These processes, combined with careful curation of inventory and the power of Wander OS, have allowed the company to maintain its high Net Promoter Score (NPS) even as it scales.

The $50 Million Series B Funding Round

Wander recently announced a $50 million Series B funding round led by QED and Fifth Wall, with participation from Redpoint, Uncorp, Authentic, Comcast, Brier Capital, and Starwood Capital. This significant investment is a testament to the company's growth and potential in the vacation rental market.

Use of Funds: Focusing on Activation

Rather than using the new funding solely for rapid expansion, Wander is taking a more measured approach. John Andrew explains:

"The focus for the company is on growth and intelligent scale. We're focusing on activation - how do you activate the maximum amount of unit economics for those core properties? How do you focus on activating those customers to go and experience what a Wander is?"

This strategy involves various initiatives from both product and marketing perspectives, with the goal of maximizing the value of existing properties and users rather than solely pursuing aggressive growth.

The Importance of Thoughtful Scale

John Andrew emphasizes the concept of "thoughtful scale" as Wander moves forward:

"When I talk about the idea of thoughtful scale, which has been the topic with the team and at the board level, it really boils down to understanding your unit economics and sometimes understanding where things are working and where they're not."

This approach involves being more selective about which properties to add to the platform, focusing on locations with higher revenue potential, and optimizing marketing spend for better returns.

The Future of Wander

Looking ahead, John Andrew envisions Wander becoming a comprehensive travel infrastructure company. Some key areas of focus include:

Expanding the Property Portfolio

Wander aims to capture a significant portion of the estimated 300,000 "Wander-worthy" locations globally, representing about $35 billion in Gross Merchandise Value (GMV).

Enhancing the Concierge Experience

The company plans to develop a full-featured concierge service that can handle all aspects of a traveler's needs, even for stays outside of Wander properties.

Wander Living

A new initiative called Wander Living is being tested, which would offer full property management services for primary residences, allowing homeowners to benefit from Wander's expertise in their own homes.

Productizing Wander OS

There are plans to offer Wander OS as a standalone product for the broader vacation rental industry, leveraging the company's technological expertise.

Embedded Financial Products

Wander is exploring the possibility of offering embedded finance options, such as insurance and mortgage products, to further enhance the travel experience.

Conclusion

Wander's journey from owning properties to becoming a managed marketplace demonstrates the company's ability to adapt and innovate in the competitive vacation rental space. With a focus on maintaining high-quality standards through technology and thoughtful scaling, Wander is well-positioned to continue its growth and potentially reshape the travel industry.

As John Andrew summarizes, "The goal, the vision statement for Wander, is to build the infrastructure for people to experience the world. Ideally, we build the Apple of Travel. I think that the world needs a really good travel company."

With its recent funding round and clear vision for the future, Wander is poised to make significant strides in achieving this ambitious goal.

Article created from: https://www.youtube.com/watch?v=UB4t8FuKz9M