HomeAway: A Find in Online Vacation Rentals

Venture capitalists such as Institutional Venture Partners are pouring $250 million into the startup, which already is turning a profit

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By Spencer E. Ante

November 11, 2008 at 10:01 AM UTC

This article is for subscribers only.

There's no place like a second home. Or so the backers of vacation-rental startup HomeAway believe. Venture capitalists are so enamored of the three-year-old Austin (Tex.) company, in fact, that they're plowing a staggering $250 million into HomeAway—the biggest investment in an Internet outfit since the height of the dot-com bubble in 2000.

"This thing is a very well-kept secret," says Todd Chaffee, general partner with Institutional Venture Partners, a VC firm that ponied up $45 million in the investment round, announced Nov. 11. The rest of the financing came from Technology Crossover Ventures and Redpoint Ventures. Previous investors include Trident Capital and Austin Ventures, which remains the largest shareholder of the company. "It's time to unveil it and turn this thing into the next eBay or Expedia or very high-profile Internet company," says Chaffee, who led his firm's investments in Yahoo!, Netflix and Verisign.