HomeAway Secures Record $160 Million in Financing.

Vacation Rental Leader Announces Acquisition of VRBO.com

AUSTIN, Texas -- HomeAway, Inc., the world's leader in online vacation rentals, today announced it has secured a record $160 million in debt and equity financing to fund continued expansion initiatives throughout the world Co including the acquisition of the leading "rent-by-owner" vacation rental website in the U.S., VRBO.com (Vacation Rentals by Owner).

This funding represents the largest financing of an Internet software and services company in the U.S. in 2006, according to Standard & Poor's Capital IQ.

Existing investors Austin Ventures and Redpoint Ventures and new investors American Capital (ACAS), Institutional Venture Partners (IVP) and Trident Capital provided the financing. Since being founded in February 2005, HomeAway has raised more than $200 million in capital and has quickly become the worldwide leader for vacation rentals on the Internet.

Proceeds from the financing will fund additional acquisitions of leading vacation rental Web sites to increase rental inventory, boost marketing efforts to grow traffic, and continue the development of industry-leading technology that improves the experience of locating and renting homes online.

"Vacation rentals are a great value for leisure travelers and HomeAway is committed to expanding the market by making it as easy as possible for travelers to locate, compare and secure properties through the Internet," says Brian Sharples, founder and chief executive officer of HomeAway. "The unprecedented number of people who own second homes in the U.S. and Europe means the supply of quality rental properties has never been stronger and that owners are now realizing the ease and great return on investment of marketing online. This financing enables HomeAway to grow its worldwide marketplace even more quickly."

Simultaneous with the close of the latest round of financing, HomeAway announced the acquisition of VRBO.com, HomeAway's largest competitor, representing nearly 65,000 properties worldwide. VRBO.com was founded in 1996 and is the market-leading online directory for rent-by-owner vacation properties in the U.S. With the addition of VRBO.com, the HomeAway portfolio of vacation rental websites, which includes HomeAway.com, now comprises more than 130,000 properties in nearly 100 countries. The terms of the acquisition were not disclosed.

"VRBO has always provided an extraordinary value for its customers. We are privileged to have them as part of our company," says Sharples. "We look forward to leveraging the resources of both VRBO and HomeAway to create the world's largest and most diverse vacation rental marketplace and provide tremendous benefits to both the advertisers and travelers who use our sites."

"VRBO has had many opportunities to sell over the years, but we chose to sell to HomeAway because we recognize that they are making the right investments and management decisions to establish vacation rentals as a popular travel alternative for the mass market," says David Clouse, founder of VRBO. "We wanted our customers to be a part of that."

VRBO.com, which will continue to operate as an independent brand run by the existing management team, provides travelers quick access to vacation rental information without a lot of frills. Together, HomeAway and VRBO now represent the best and largest online vacation rental sites in the world and will attract an estimated 100 million unique visitors in 2007.

"With this financing and the acquisition of VRBO, HomeAway has established itself as the clear market leader in online vacation rentals," said Todd Chaffee, managing director of IVP. "The company's management team is the best in the business and we are extremely optimistic about HomeAway's future growth."

Phil Siegel, partner of Austin Ventures, says HomeAway had significant investor support because of the market opportunity and the company's leadership position. "HomeAway has all the ingredients we look for in a later-stage private equity investment - big market opportunity, great customer value proposition and clear industry leadership," says Siegel. "Most notably, HomeAway is already highly successful in terms of both revenue growth and profitability."

"We had significant investor interest in this deal, which we believe reflects that HomeAway has aggressively staked out a vertical segment that is tailor-made for the Internet," says Thomas Weisel, chairman and chief executive officer of Thomas Weisel Partners, which advised HomeAway on the financing.

HomeAway (as WVR Group) received $49 million in equity funding prior to the most recent investment round.

VRBO.com now joins the HomeAway portfolio of vacation rental Web sites: HomeAway.com, CyberRentals.com, GreatRentals.com, A1Vacations.com, TripHomes.com, Holiday-Rentals.co.uk in the United Kingdom and FeWo-direkt.de in Germany. HomeAway sites enable second homeowners and rental managers to easily market their properties to a worldwide audience of travelers for an annual subscription fee.

About HomeAway, Inc.:

HomeAway, Inc. is the worldwide leader for vacation rentals on the Internet. Each year, more than 50 million travelers visit the HomeAway global marketplace that comprises more than 130,000 vacation rental homes across 100 countries. The HomeAway portfolio of vacation rental sites includes HomeAway.com, as well as VRBO.com, CyberRentals.com, A1Vacations.com, GreatRentals.com, TripHomes.com, Holiday-Rentals.co.uk (UK), HolidayRentals.fr (France) and FeWo-direkt.de (Germany).

Led by an experienced team of online and travel industry experts, HomeAway is based in Austin, Texas and is funded by leading venture capital firms Austin Ventures, Redpoint Ventures, American Capital, Institutional Venture Partners and Trident Capital.

About American Capital:

American Capital is a publicly traded buyout and mezzanine fund with $11.5 billion in capital resources under management. American Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts, provides capital directly to early stage and mature private and small public companies and through its asset management business is a manager of debt and equity investments in private companies. American Capital provides senior debt, mezzanine debt and equity to fund growth, acquisitions, recapitalizations and securitizations. American Capital invests from $5 million to $500 million per company.

About Austin Ventures:

Austin Ventures has been working with talented entrepreneurs to build valuable companies since 1979. With $3 billion under management, AV is the most active venture capital firm in Texas, and one of the most established in the nation. With a focus on business services, information services, computer and communications hardware, and enterprise software, Austin Ventures invests at all stages of company development, from $100,000 "planned experiments" to $50+ million investments in management buyouts.

About Institutional Venture Partners:

With more than $1.6 billion of cumulative committed capital, Institutional Venture Partners (IVP) is one of the premier venture capital firms in the United States. Founded in 1980, IVP has invested in over 200 privately held companies, and more than 80 of these companies have gone public. The firm's General Partners have more than 100 years of combined venture capital experience. IVP is currently investing IVP XI, a $300 million fund focused on expansion-stage investments in rapidly growing information technology companies.

About Redpoint Venture Partners:

Redpoint Ventures was founded in 1999 by top partners each from Brentwood Venture Capital and Institutional Venture Partners (IVP), two leading venture firms. With more than a combined 100 years of operational industry and venture capital experience, Redpoint looks at technology investing from the perspective of supporting the entire process of early-stage company development. Redpoint's investments focus primarily in four areas: mobile wireless platforms and applications, consumer Internet services and platforms, enabling technologies for the digital home, and systems and software for the enterprise infrastructure.

About Thomas Weisel Partners Group, Inc.

Thomas Weisel Partners Group, Inc. is an investment bank, founded in 1998, focused principally on the technology, healthcare and consumer sectors of the economy. Thomas Weisel Partners Group, Inc. is managed as a single operating segment and generates revenues from three principal sources: investment banking, brokerage and asset management. The investment banking group is comprised of two disciplines: corporate finance and strategic advisory. The brokerage group provides equity and convertible debt securities sales and trading services to institutional investors, and offers brokerage, advisory and cash management services to high-net-worth individuals and corporate clients.

About Trident Capital:

Trident Capital is a leading venture capital and private equity firm with over $1.5 billion of capital under management, including $400 million raised in a recently closed Fund VI. Trident's core investment focus has remained consistent since inception in 1993, focusing on investments in the business services, information services and software sectors across a variety of industries. Within the sector focus, the firm invests across multiple stages, including traditional venture capital investing as well as investments in micro-cap public companies, buyouts and consolidation platforms. Trident has made 120 investments since inception.