Good VCs aren’t afraid of getting their hands dirty. Maybe that’s why many of them are now rushing to invest in the camping sector.
Over the past year, a troop of camping-related startups has successfully pitched their ideas to investors, raising hundreds of millions of dollars in the process.
Part of the attraction is that American consumers have rediscovered their love of the great outdoors. More than 7.2 million households have caught the bug over the past five years, raising the total number of camping households in the U.S. to a record high of 78.8 million, according to the 2019 KOA North American Camping Report.
“Camping is absolutely a venture scale opportunity,” said Tripp Jones, a general partner at August Capital and an early investor in Hipcamp. “This is not a just some curious niche, which I think is what some investors thought early on. What really gets me excited as a VC is how much bigger the opportunity here can be.”
Hipcamp, which recently raised a $25 million Series B round led by Andreesen Horowitz, is an online marketplace for discovering and booking camping trips on over 300,000 privately owned campsites, ranches, vineyards and more.
Tentrr, a similar startup, closed an $8 million Series A round in April led by West Venture Partners and included participation from Obvious Ventures and Great Oaks Venture Capital. The company connects campers with private landowners who want to share their land for a fee, sort of like an Airbnb for the great outdoors.
“The reality is that 60 percent of the U.S. consists of undeveloped privately owned land,” Jones said. “Just hearing that statistic, you can quickly do the math and figure out there is a huge opportunity here.”
He says campers are hungry for new experiences that go beyond the typical National Forest or recreational vehicle (RV) park, and that a startup like Hipcamp is providing entrée to amazing properties that no one really had access to before.
“There was this latent supply and demand that no one was really tapping into,” Jones said. “Hipcamp can expand the market and fulfill demand by opening up all these new places to go camping.”
He adds that Hipcamp is not just about paying for a place to stay outside at night; it’s about facilitating one-of-a-kind experiences in nature. For instance, one property owner on Hipcamp lets people who camp on her property harvest duck eggs. Another provides access to top-notch fly-fishing at a nearby river that runs through his property.
So what is driving the resurgent popularity of camping, and why is it just now starting to command the attention of investors and entrepreneurs? After all, camping has been around since the dawn of man. Yet it’s only over the last 12 months that August Capital has tracked about 50 new camping startups that have launched around the world.
“I don’t have solid data to answer that question. But anecdotally, I think younger generations who have been immersed in technology all their lives now have this primal urge to get outside,” Jones said. “We have changed our culture so much where all we do is live in big cities, eat avocado toast and stare at our screens all day. I think people have this need to escape from all this, an urge to disconnect from technology and reconnect with nature, even if it’s just for a night.”
Anthony Lee, a managing director at Altos Ventures, has a slightly different take. He believes a driving force behind this newfound interest in camping could be directly related to social media and the desire to capture unique, “instagramable” experiences.
“We are seeing a real preference among millennials for experiential travel,” Lee said. “They want to do things that are interesting and different, rather than just staying in yet another cookie cutter hotel.”
One of the things that attracted an investor like Lee to camping is that the activity is increasingly cross-cultural and cross-generational. For instance, of the 1.4 million households that started camping in 2018 alone, 56 percent are Millennials and 51% are from non-white groups, according to the KOA North American Camping Report.
“Camping is having this generational renaissance now,” Lee said. “Take RVs, for instance. They are something you will see at Burning Man but also at the Talladega Superspeedway. They are popular with millennials and with retired boomers. They are at football tailgates and at hip music festivals. So, RVing is something that is equally appealing to both Blue and Red America these days.”
It’s that thinking that led him to invest in Outdoorsy, a marketplace that connects RV owners with people who want to rent their vehicles for camping trips and other excursions. To date, the company has raised $75 million from Altos, Autotech Ventures, Aviva Ventures and others.
“We think Outdoorsy represents both an enormous and non-obvious market,” Lee said. “There are something like 18 million RVs that are in the U.S. and on average they are used only about 12 days a year. And for most people who own them, they are literally their largest or second largest asset, after their home. What’s more, they depreciate. So you have this depreciating, under-utilized asset that, at the same time, millions of other people are interested in accessing.”
He says that before Outdoorsy came along, there were too many obstacles to RV rentals, despite the latent demand. For instance, it was very hard for people who owned a RV to rent them out because getting insurance was a major hassle. Outdoorsy solved that problem by teaming with larger insurance providers to protect both renters and owners.
“Outdoorsy also had to find supply,” Lee added. “They had to had find both professional dealers and hobbyists who were interested in listing their RVs. Before Outdoorsy, there were very few places you could go to rent an RV.”
A fan of both marketplaces and alternative travel, Lee says that Outdoorsy is doing for RV rentals what Airbnb did for vacation rentals. “There were always ways to do vacation rentals, but until Airbnb came along, it wasn’t something that was mainstream and available literally anywhere in the world,” he said. “Outdoorsy is breaking down all the same barriers.”
Camping is so popular now, it’s even being embraced by the pampered class who prefer soft beds, spotless bathrooms, spa treatments and world-class cuisine. But in this case, it’s called glamping, which offers a cross between modern luxury and a taste of nature.
And, of course, venture-backed startups are setting the pace.
Collective Retreats, which creates luxury camping experiences in primary destinations across the country, has raised about $12.5 million from First Round Capital, Slow Ventures and others. Instead of spending hundreds of millions of dollars to build physical buildings and hotels, Collective Retreats drops in an asset-light luxury hospitality concept in beautiful destinations during the high season, and then just moves those assets somewhere else in a different season.
“We’ve created an asset-light model where we work with property owners to create temporary luxury accommodations that are connected to their surroundings but still have all the creature comforts you expect, from high-thread count sheets to exceptional dining,” said Collective Retreats founder and CEO Peter Mack in a blog post. “This lets us put retreats in places where traditional hotels simply couldn’t exist; we look across the country at mountain tops, farms, valleys and vineyards for the most inspiring places.”
The company’s nightly rate can reach upwards of $700.
“There is a willingness among younger generations to actually spend quite of bit of money on these experiences,” said Lee of Altos Ventures, which is also an investor in Collective Retreats. “The new funding will go toward product innovation. For example, the company just launched a new unit called an Outlook Shelter, which are self-contained climate-controlled luxury hotel rooms that you drop in at stunning destinations anywhere in the country.”
Other glamping startups include AutoCamp, which recently raised $115 million led by Whitman Peterson. The company provides outdoor accommodation in custom-designed Airstream RVs and luxury tents that are accentuated by mid-century modern guest facilities.
Meanwhile, Getaway, a hospitality company that offers escapes to small yet well-appointed cabins in nature within two hours of major cities, just closed a $22.5 million Series B financing round led by Starwood Capital Group.
Lee concedes there are some unique challenges when investing in a camping startup. For starters, it’s very different than investing in a typical software company.
“Here you’re dealing with real people in the real world,” he says. “RVs breakdown, guests get spider bites. So, the level of execution has to be very high to succeed. However, if you can scale the technology, and then deliver on the experience every day, then you have something that is very valuable and very hard for competitors to duplicate.”
Tom Stein is a VCJ correspondent from Palo Alto, California. He can be reached at firstname.lastname@example.org.