Group purchasing organizations are typically used in the healthcare setting by hospitals, nursing homes, and home health agencies to aggregate their purchasing volume to negotiate better deals with manufacturers, vendors, and distributors. But they do not have to be limited to healthcare as the economies of scale through group leverage can be beneficial for any group that’s interested in the same products and services. HostGPO is a group purchasing organization and marketplace for those operating short-term rental, vacation rentals, and hospitality businesses. The member-only marketplace offers a wide array of services for anyone in the space including procurement for furniture, appliances, supplies, and even services. HostGPO features exclusive partnerships with organizations like Williams Sonoma, Brooklinen, Ace Hardware, Solo Stove, Terminix, and Nest. For most operators, getting a rental up and running involves numerous time-consuming trips to various vendors and stores; HostGPO streamlines the process into a few clicks in a digitally-native experience. Membership starts at a very accessible $10M for businesses that have 10 units with a free 3-month trial to all new users.
LA TechWatch caught up with HostGPO Cofounder and CEO Jeff Iloulian to learn more about the business, the company’s strategic plans, recent round of funding, and much, much more…
Who were your investors and how much did you raise?
We raised $6M in funding led by Navitas Capital and OMNIA Partners with participation from 75&Sunny, Brian Lee, and PAR Capital Ventures.
Tell us about your product or service.
HostGPO is a members-only marketplace and group purchasing organization (GPO) for the vacation rental, short-term rental, and hospitality industries. HostGPO provides operators with a digital platform to procure goods and services at significant discounts, as well as digital tools to streamline the procurement and design process. HostGPO works closely with a curated group of suppliers (i.e. furniture, appliances, home goods companies, etc.) to aggregate demand and bring them customers within its target segments.
What inspired the start of HostGPO?
As a vacation rental operator myself for almost a decade, I personally experienced many of the pain points involved with buying and setting up homes in this space.
How is it different?
HostGPO is the first group purchasing organization in the vacation rental industry. While a few copycat businesses have started to arise, HostGPO sets itself apart with its superior and exclusive vendor contracts and its proprietary ordering platform.
What market you are targeting and how big is it?
Anyone with three or more vacation rental units is a great fit, some of our members have thousands of units and our large vacation rental companies do as well.
What’s your business model?
We are primarily a SaaS-based model that charges an annual subscription fee to our members.
How are you preparing for a potential economic slowdown?
Our business is affected in the same way as anyone else in the hospitality and travel sector, when fewer folks travel there is less of a need to furnish or restock short-term rentals. One way we prepare for these cyclical eventualities is by extending the length of many of our contracts and including price increase barriers for our membership.
Our business is affected in the same way as anyone else in the hospitality and travel sector, when fewer folks travel there is less of a need to furnish or restock short-term rentals. One way we prepare for these cyclical eventualities is by extending the length of many of our contracts and including price increase barriers for our membership.
What are the milestones you plan to achieve in the next six months?
We hope to be able to continue adding vendor partners to our marketplace, and inch closer to a true “one-stop-shop” model.
What advice can you offer companies in Los Angeles that do not have a fresh injection of capital in the bank?
If outside capital isn’t available to you right now, consider focusing on cutting your costs and incentivizing team members who align with your vision by granting them additional equity options. Ultimately, much of your outside capital would be used for labor costs anyways, so if you are able to retain team members with that same equity it’s kind of six of 1 of 1/2 dozen of the other.
Where do you see the company going now over the near term?
With our investment partners behind us, we feel that HostGPO can continue creating an unbeatable platform that will make operating a rental easier and continue to unify a fragmented industry
Where’s the best place to hold a team offsite?
Los Angeles is our HQ in some respects, but we are fully a remote company.
