The Plum Guide: building the global boutique hotel brand, one home at a time
For anyone interested in the power of technology and the audacity of visionary entrepreneurs, Airbnb is one of the most inspiring and fascinating stories of the last decade. An idea that seemed crazy, very unlikely to succeed in at best a niche market has turned into one of the most powerful and successful consumer marketplaces of the 21st century lauded for its design and approach to community. They have not only created an asset light competitor to the incumbents in the hotel industry, but arguably they have created an entirely new market and industry. Just take a look at the number of services companies that are being built on top of their success.
Now that there is this new fast-growing market out there, what are the opportunities? The online marketplaces that have emerged from the Internet have often demonstrated the power of network effects sometimes resulting in winner takes all dynamics. However, some old consumer preferences don’t die and in the hotel industry, differentiation is key resulting in a fragmentation of brands. The largest hotel chains all own several brands trying to cater to different types of customers. Marriott, the biggest hotel group in the world owns 30 brands, Intercontinental group has 11 and Hilton an umbrella of 13 brands. It’s not only a vast selection of rooms and prices that count. Brand matters.
In the new “homestay” market, the Plum Guide is on a mission to build the global boutique hotel brand. Their recipe is relatively simple in principle yet sophisticated in practice: through a combination of human expert curation and data driven tests, they identify and select the very best homes in each city. Through this rigorous selection process, they aim to offer consumers a consistent level of service and comfort in thousands of unique homes. They call it the “science behind the perfect stay”. Whether it’s the high pressure shower, the quality of the mattress, the sophistication of the audio system or the number of local commerces in the neighbourhood, The Plum Guide collects about 500 data points for every new home and is progressively building an amazing dataset of the world’s most beautiful homes.
Since their launch in 2016 when we led their seed round, the company has been growing very fast in London while continuously refining their selection process and building the brand. We’re excited to see Octopus lead their series A joined by BGF to take their unique approach international.
Honestly, although it’s not the first time we’re involved in this new market (while at Index, Robin was on the board of Onefinestay acquired by Accor in 2016), the idea of investing in a new company in the “Airbnb market” was both scary and exciting (I guess that’s the case for most seed investments). Scary because as I have explained we have so much admiration for Airbnb as a company and it’s hard to find better than them in terms of execution. Exciting because this is a fast-growing market and we felt there was still an opportunity to participate and build a valuable company. It was particularly exciting because it was also one of these great examples of perfect founder/market fit. For a company trying to reinvent the hotel experience, it’s hard to find a more hospitable guy than Doron Meyassed, the founder & CEO. When you meet Doron for the first time, you can easily imagine him as the dream hotelier trying to nail the perfect stay - the César Ritz of a new age. His sense of hospitality extends to the way he communicates and brings his team together to execute and succeed.
Finally, our investment in the Plum Guide is also a story about angels who so often have a discrete but critical roles in the early days of a startup. We were introduced to the company via Jason Goodman and co-invested alongside several people we have had the pleasure to work with and/or back over the years incl Christopher Spray, Alex Chesterman, Errol Damelin, William Reeve, Alex Saint, etc. Doron has done an amazing job at leveraging each and every one of them. It’s been a real pleasure to work with the whole team over the past year and a half. We’re excited by the journey ahead and now, as Doron would say (already inspired by his new investors Octopus): Next Play!
