Stay on Top of Enterprise Technology Trends
Get updates impacting your industry from our GigaOm Research Community
Long before the recent crop of collaborative consumption startups found fame, there was CouchSurfing, originally a non-profit that helped connect travelers to hosts. The feel-good story, however, was threatened last year when it incorporated with a B Corp certification and raised $7.6 million, prompting user fears that CouchSurfing was selling out.
But the service has only continued to grow in popularity, adding two million more members in the last year to get to 5 million members. And now, it’s looking to build upon that momentum with a new $15 million Series B investment, led by General Catalyst Partners with help from Menlo Ventures and existing investors Benchmark Capital and Omidyar Network. The San Francisco-based company will use the new money to shore up its infrastructure, improve its products and hire more employees.
CouchSurfing often gets mentioned along with Airbnb, which also helps people find a place to sleep from fellow users. But CEO Tony Espinoza said the goal of CouchSurfing has been about more than just finding a place for someone to sleep. The service is looking to build a global human travel network and foster connections between users, so hosts aren’t just making their beds available, but welcoming potential friends into their lives. Users have already had more than 10 million face-to-face encounters and many are participating in 40,000 interest groups on CouchSurfing.
The basic service is free, but users can pay a one-time fee of $25 to verify their identity and location, something many serious users pay for. Espinoza said CouchSurfing has been generating significant revenue and was not in danger of exhausting its previous funding. But he said the chance to get backing from General Catalyst, which has invested in Kayak (s kyak) and Airbnb, and Menlo Ventures, whose managing director Shervin Pishervar has been an vocal advocate of collaborative consumption, was too good to pass up.
The new money, however, may raise more questions from die-hard fans worrying about the startup becoming more corporate. With $22.6 million under its belt, it’s a far cry from the plucky communal startup that was founded in 2004 and survived on donations and code contributions from users. Now, it has 30 employees, and it’s churning out improved products including the recent addition of new mobile applications.
Espinoza said even with its growing following, CouchSurfing is still just scratching the surface of what it can become. He said while there’s a need for more transactional services like Kayak (s k) and Airbnb, CouchSurfing is serving a big opportunity by bringing people together through travel.
“When people want to have a great time, the best way to do that is through people,” Espinoza said. “With Kayak or Airbnb, when you meet people through those services it’s not a natural act to add them as a friend on Facebook (s fb). When you use CouchSurfing, you use it to find people,” Espinoza said.