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A year ago, the peer to peer travel site Wimdu — a European version of Airbnb — didn’t even exist. Now the company’s CEO, Arne Bleckwenn, is presiding over a business that’s expanding rapidly and getting serious traction: one of the first things he proudly points out to me is that revenues have nearly quadrupled in the past three months, and there are now well in excess of 50,000 properties on the site, spread across dozens of countries.
That’s significant, since Airbnb is on a tear of its own. It’s pushing hard off the back of a monster $112m round of investment, and It’s just acquired British travel site Crashpadder as part of a plan to expand further into the European market ahead of the London Olympics.
The two seem destined for a headlong crash into each other, but Bleckwenn is quick to suggest that the market is big enough to support them both.
“I think there will be a couple of really big companies, and then a number of smaller ones too,” he says. “To me, the reality is that we’re both taking business away from the hotel industry.”
On the surface at least, the rangy German — a serial entrepreneur with a handful of previous web businesses behind him — is targeting the big hotel chains, with the hospitality industry heading towards half a trillion dollars. They are concerned about Wimdu and others, he says, because peer-to-peer accommodation not only cuts hotels out of the loop but it also offers people something that they can’t: the chance to feel like a local.
“The fact is that if you ask people on the street what is Airbnb or what is Wimdu, most of them won’t know,” he admits.
Still, the company feels like it’s turned a corner. Since the start of the year things have cranked up, with visits growing dramatically and revenues now in “seven figures”.
So what accounts for the massive surge in growth over the past few months? It’s not really seasonal — unlike more traditional travel businesses — because the average Wimdu user largely books weekend city breaks at short notice rather than long-term holidays. Instead, he suggests, it’s largely down to smart marketing, he says: nothing revolutionary, but well-focused and well-funded.
Funding, of course, is not something Bleckwenn has to worry much about. The company raised a bumper $90 million last summer from Swedish investment Kinnevik and incubator Rocket Internet — the infamous German clone factory, which we have covered in plenty of detail here in the past. That money is what has helped Wimdu get the wheels spinning so fast, so soon, but it also comes with serious strings attached (Rocket companies are notorious for giving founders only a limited amount of equity, and pushing workers very, very hard.)
These days, says Bleckwenn, Rocket has less input in the way the company is run. They’re starting to develop their own identity, separate from the mothership, and exploring what they can do outside of the day-to-day business of getting up and running.
“They [Rocket] are really focused on short-term; getting the company started, building fast, executing quickly,” he says. “They have a lot of expertise in marketing and sales that has been useful. But bow we’re successful they do not get involved very much, and we are able to think more long-term and build our own company culture which is very different from Rocket’s.”
Still, he thinks the fact that Rocket focuses on building companies in Europe gives Wimdu other advantages, not just aggressive DNA and a different market to target from its American cousins. At the very least, the company has a deeper understanding of what it takes to launch in new countries, since the European market is so complex.
It’s an approach that has helped Wimdu spread into more than 100 countries, and led it to enter the Chinese market in a slightly different way, through a spin-off business called Airizu. This is something that European businesses should be using to their advantage more, he suggests.
“It’s not just about translating your website,” he says, shaking his head. “For example, when we looked at launching in Switzerland, there people there were immediately asking about insurance coverage. That’s something that Americans don’t tend to ask. You have to treat different countries, different cultures, in different ways.”