As the sharing economy gathers pace, search engine and price comparison website Likibu is bidding for a sizeable share of the market for seasonal person-to-person property rentals.
The Likibu.com platform was launched in April 2012 and now lists some 1.4 million properties, aggregating rental offers and advertisements posted on a variety of person-to-person rental sites. While airline ticket price comparison sites have been around for quite some time, Likibu is the first French site to launch a platform for property rental price comparisons based on the burgeoning ‘sharing economy’. Co-founder Aurélien Jemma based his startup on the idea of making web searches easier and helping people to find a holiday property to rent which best suits their requirements. He claims to offer “a deeper and wider range of properties faster,” arguing that “we provide clear benefits to the customer in terms of the depth of our offering.” He believes that, given the success of sites such as Airbnb, Likibu has the potential to achieve reasonable size. It would indeed be a feather in the cap of a small French website to be listed alongside the giants of leisure rental. In the longer term, Likibu’s aim is to go beyond the French market, “which is not all that profitable in terms of customer acquisition cost,” and expand internationally.
Find a profitable business model
The current challenge for the French startup lies in setting up affilation programmes linked to the offers made by rental sites that are likely to develop into “real partnerships”. So far platforms such as US-based HomeAway, German platform Wimdu, Swiss-based House Trip, French Abritel, Singapore-based Roomorama, French company Chambre à Louer, among others, have agreed to pay to have their offers posted on Likibu.com but Aurélien Jemma knows that he will need to evolve the business towards a more robust partnership approach. His goal is to move from a Cost Per Acquisition (CPA) model, whereby his firm receives a commission – a business ‘finder fee’ – on sales made following referral from Likibu, to a Cost Per Click (CPC) model, which will provide the company with a small payment for each unique click. “With CPA, you’re never in full control of your own business (...) whereas with CPC, you know exactly how many customers have been sent to your partner, and you bill your partner on this basis,” explains Jemma. These calculations are extremely important, given that this is the only way Likibu generates revenue, as the price comparison site does not do any advertising of its own.
Raising funds to boost technical capacity
On the technical front, the Likibu team faces issues with traffic volume as there is a huge and growing number of offers, with constant real-time updates from the sites hosting the original advertisements. “It’s vital to have a large volume of offers in this market, as it’s very liquid but also highly competitive,” Jemma points out, predicting: “I’m convinced that within two to three years, a price comparison site in this field will have emerged and taken a pretty good market share.” As this sector of the ‘sharing economy’ appears to be taking off, the young French entrepreneur is planning to launch a fund-raising effort in September. This first round of external financing will be used to enhance search engine optimisation for Likibu on Google et al, in order to help the site hit a better target of unique visitors per month.