Pacaso Nabs Millions to Sell Shares in Luxurious Second Homes as Neighbors Protest

Harri Weber

Harri is dot.LA's senior finance reporter. She previously worked for Gizmodo, Fast Company, VentureBeat and Flipboard. Find her on Twitter and send tips on L.A. startups and venture capital to harrison@dot.la.

Pacaso Nabs Millions to Sell Shares in Luxurious Second Homes as Neighbors Protest

Pacaso wants to sell you a stake in a top-tier second home, and it just raised $125 million to do so — that is, if you're among the minority of homeowners who can afford one.

The startup, founded by former Zillow executives Austin Allison and Spencer Rascoff, turns luxurious homes such as this vast, seaside Malibu estate into limited liability companies. It then splits them into fractional shares, selling to up to eight different buyers apiece. Pacaso takes a 12% cut of the purchase price and charges members $99 per month each to handle everything from furnishing to lawn care. Partial homeowners can divvy the time they spend on the property using the startup's apps and website.


The latest round values Pacaso at $1.5 billion, up from the $1 billion valuation the real estate tech startup hit in March. Softbank led the deal, with participation from other firms including Greycroft, Crosscut, Fifth Wall, Global Founders Capital, LGBTQ-focused syndicate Gaingels, and Rascoff's fund, 75 and Sunny. Rascoff also co-founded this very website, along with Hotwire.com.

Since it launched just shy of a year ago, Pacaso has raised more than $215 million. The funds have fueled its expansion into 25 destinations, such as Miami and Aspen. Next up, the firm is charting a path into Europe, starting with Spain later this year.

"In January, we were about 30 people. Today we're well over 120 people," Allison told dot.LA, adding that in the last quarter 2 million people visited the company's website. "Our annualized revenue run rate is now north of $330 million, and that's from zero one year ago." Allison declined to share the number of homes Pacaso has sold to date and estimates Pacaso's customer base is "in the hundreds."

Pacaso's debut coincided with a second-home market boom, as white-collar workers seized on pandemic-era remote work policies and friendly mortgage rates. But amid its growth, the startup has drawn ire from many newfound neighbors, who argue the company is building a "glorified timeshare" business in their community.

A petition against Pacaso's presence in Sonoma neighborhoods, known for their elaborate vineyards, has garnered 2,969 signatures. Its organizers, Stop Pacaso Now, call the startup "the newest way for Silicon Valley bros and venture capital vultures to make a quick buck at your expense." The group warns, "You may not realize the house next door sold to Pacaso until you see a revolving cast of guests pulling up every couple of days or weeks."

Stop Pacaso Now did not respond to dot.LA's request for comment.

Pacaso says it offers "anything but" timeshares, and it's currently waging a legal fight over local timeshare rules in California's wine country. St. Helena City Attorney Ethan Walsh cautioned Pacaso in February that "it appears to be operating, facilitating, and selling timeshares under state law and the City's code." He added, "Simply calling them co-ownership arrangements does not change that fact."

Allison says that Pacaso empowers "more people to realize their second-home dream," while filling properties that would otherwise sit unoccupied for most of the year.

"We're consolidating demand. We're taking second-home owners who would otherwise be competing in the median tier and we're moving them into the luxury tier, right? It's better to have six or eight families owning one luxury second home than to have those same six or eight families buying up six or eight separate median-priced homes."

Allison says Pacaso will be good for neighborhoods and local businesses. Startups catering to vacationers such as Airbnb have driven up local rent prices and contributed to housing shortages, according to researchers at the University of Cologne. The neighbors fighting back argue their communities will experience a similar outcome.

Pacaso's founders, however, are so convinced their service is innovative that they baked the essence right into the name, evoking the legacy of experimental painter Pablo Picasso.

Pacaso is just one of many companies that have been launched by former Zillow staffers in recent years. They include Mill Valley-based Glassdoor, a site for posting employee reviews and candid assessments of current and former employers, and San Francisco-based Divvy Homes, which aims to convert renters into homeowners.

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Genies Wants To Help Creators Build ‘Avatar Ecosystems’

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Genies Wants To Help Creators Build ‘Avatar Ecosystems’

When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”

The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.

Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.

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Here's What To Expect At LA Tech Week

Christian Hetrick

Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.

Here's What To Expect At LA Tech Week

LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.

The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.

From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.

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PCH Driven: Director Jason Wise Talks Wine, Documentaries, and His New Indie Streaming Service SOMMTV

Jamie Williams
­Jamie Williams is the host of the “PCH Driven” podcast, a show about Southern California entrepreneurs, innovators and its driven leaders on their road to success. The series celebrates and reveals the wonders of the human spirit and explores the motivations behind what drives us.
Jason Wise holding wine glass
Image courtesy of Jason Wise

Jason Wise may still consider himself a little kid, but the 33-year-old filmmaker is building an IMDB page that rivals colleagues twice his age.

As the director behind SOMM, SOMM2, SOMM3, and the upcoming SOMM4, Wise has made a career producing award-winning documentary films that peer deep into the wine industry in Southern California and around the world.

On this episode of the PCH Driven podcast, he talks about life growing up in Cleveland as a horrible student, filmmaking, Los Angeles and his latest entrepreneurial endeavor: A streaming service called SOMMTV that features–what else?–documentaries about wine.

The conversation covers some serious ground, but the themes of wine and film work to anchor the discussion, and Wise dispenses bits of sage filmmaking advice.

“With a documentary you can just start filming right now,” he says. “That’s how SOMM came about. I got tossed into that world during the frustration of trying to make a different film, and I just started filming it, because no one could stop me because I was paying for it myself. That’s the thing with docs,” or “The good thing about SOMM is that you can explain it in one sentence: ‘The hardest test in the world is about wine, and you’ve never heard about it.’”

…Or at least maybe you hadn’t before he made his first film. Now with three SOMM documentaries under his belt, Wise is nearing completion of “SOMM4: Cup of Salvation,” which examines the history of wine’s relationship with religion. Wise says it’s “a wild film,” that spans multiple countries, the Vatican and even an active warzone. As he puts it, the idea is to show that “wine is about every subject,” rather than “every subject is about wine.”

For Wise, the transition to launching his own streaming service came out of his frustration with existing platforms holding too much power over the value of the content he produces.

“Do we want Netflix to tell us what our projects are worth or do we want the audience to do that?” he asks.

But unlike giants in the space, SOMMTV has adopted a gradual approach of just adding small bits of content as they develop. Without the need to license 500 or 1,000 hours of programming, Wise has been able to basically bootstrap SOMMTV and provide short form content and other more experimental offerings that typically get passed over by the Hulus and Disneys of the world.

So far, he says, the experiment is working, and now Wise is looking to raise some serious capital to keep up with the voracious appetites of his subscribers.

“Send those VCs my way,” Wise jokes.

Subscribe to PCH Driven on Apple, Stitcher, Spotify, iHeart, Google or wherever you get your podcasts.

dot.LA reporter David Shultz contributed to this report.

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