A SCOTTISH property technology company has been acquired by holiday letting giant Airbnb for an undisclosed sum.

And the California-based company, which is credited with transforming the global travel market since setting up in 2008, has declared the move will help it meet the challenges posed by new regulations around short-term property lets in Scotland.

Airbnb swooped for Letting Cloud just four years after the Edinburgh firm was established by technology entrepreneur Grant MacCusker in 2019. Letting Cloud provides an advertising platform for property agents and landlords, and now has more than 5,000 agents marketing around 500,000 properties in the holiday, short and long-term rental sectors throughout the UK per year.

Airbnb said the acquisition of the Scottish business will help it adapt to a controversial licensing scheme for short-term lets, which is due to be introduced in Scotland later this year, as well as an imminent crack down on “party houses” by the UK Government.

READ MORE: Scotch whisky casks performing better than gold, report finds

The new regulations in Scotland, which cover properties such as holiday cottages, B&Bs and guest houses, will give local authorities the ability to introduce designated control areas. That will mean that the hosts of short-term lets in such areas will be required to apply for a licence before accepting bookings or receiving guests before October 1.

The scheme has been designed to alleviate concerns over the impact of the rise in short-term lets in popular tourism destinations such as Edinburgh, including anti-social behaviour, and a reduction in the number of homes available for local populations.

However, it has been fiercely opposed by the Scottish tourism industry, which has highlighted concerns over the cost of implementing the scheme at a time when the sector is facing high costs and attempting to recover from the ravages of the pandemic. Tourism industry figures have expressed fears over the impact the scheme could have on rural short-let operators which they say already comply with regulations on building standards and health and safety.

READ MORE: Isle of Arran Distillers motoring on despite ferries saga

Letting Cloud developed technology that verifies the end user when landlords set up accounts in a way said to be similar to the process of establishing a bank account. The technology allows a landlord’s rental address to be matched with details on file at landlord registration. This is understood to make the process more secure while combating deposit and rent fraud and cracking down on non-registered landlords attempting to rent property for short-term lets.

However, neither Mr MacCusker nor the 11 staff he employs at Letting Cloud will be transferring to Airbnb further to the deal. A spokesman said the staff have been given “substantially enhanced” redundancy packages, noting that Mr MacCusker’s current priorty was on supporting those affected.

A handover process is currently underway, with Airbnb integrating everything under its Belo logo.

Mr MacCusker said: “Our software behind the main website which conducts all the verification checks required to complete a successful let is what attracted Airbnb. To be honest it hasn’t really sunk in yet.

READ MORE: North Sea player raises windfall tax concern as it falls into red 

“There was a £6 million seed round on the table from investors in USA and London, and another offer from a US company looking to acquire us and move into this space in the UK but I went with the Airbnb offer as it fitted in with the technology we had built.

“It’s a good fit, we share similar values and know our best work done to date will continue.”

Airbnb said the acquisition will benefit agents and landlords and improve the rental experience for those using the short-term and holiday rental sector.

The company’s director of engineering, Jordanna Kwok, said: "We were attracted by the array of interesting problems being tackled by Letting Cloud, and how they were addressing them using modern and emerging technology.

“Whilst both companies shared similar values and market share, the technical acquisition will bring more clarity to the UK short-term and holiday rental market.

“Airbnb are continuing to thrive on solving interesting problems which will help with the recent government legislation being rolled out in Scotland and the UK.”