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The mobile booking sector is hot in the investment community, even if Americans are still very early in its adoption. The last minute hotel booking app company HotelTonight, already red hot among investors, has secured another $45 million in funding, bringing its total take to a whopping $80.85 million.
That means that in less than three years, San Francisco-based HotelTonight, which prides itself on three-tap, same-day bookings on mobile devices for hotels in more than 100 destinations after an initial, one-time registration, has achieved a valuation likely in hundreds of millions of dollars.
Coatue Management, a hedge fund which has been a large investor in Priceline and Expedia, and specializes in pre-IPO companies, led the round, and this is the first time it has done so. Earlier this year Coatue established a $375 million investment fund.
Other participants in the round include GGV Capital and existing investors Battery Ventures, Accel Partners, U.S. Venture Partners and First Round Capital.
What does it all mean?
HotelTonight co-founder and CEO Sam Shank tells Skift HotelTonight plans to double its staff to around 200 employees over the next year, will focus on improving its “product and platform,” and will expand domestically and internationally.
Shank calls the latest round “very validating,” adding that he wouldn’t have predicted two-and-a-half years ago when he co-founded the company with COO Jared Simon and CTO Chris Bailey that the mobile-only hotel-booking app would find itself in such an enviable situation.
Asked whether Coatue’s focus on pre-IPO companies means there could be an IPO in HotelTonight’s future, or how many acquisition nibbles have rolled in, Shank says an exit “will materialize when it materializes,” but for now the company is “laser-focused” on its on-demand hotel bookings.
With the funding infusion, you can expect HotelTonight to add more capabilities to support hotel groups, as opposed to a focus on independents, and to offer “more hotels, in more currencies and in more languages,” Shank says.
Another emphasis will be to make the handful of hotels that HotelTonight curates for users at noon each day more relevant to each individual, Shank says, with smartphones making personalization more doable.
In its short history, HotelTonight has made one talent acquisition, picking up PrimaTable in October 2012.
Perhaps another acquisition or two would be in the offing given HotelTonight’s new bankroll, and the ranks of competitors doing similar things in Spain, Germany, and Asia.
“We are opportunistic about things like that and we are not saying that this is for going on a shopping spree,” Shank says.
Meanwhile, Shank says the composition of HotelTonight’s board doesn’t change with the new funding.
But, with $45 million in new funding, the available resources do change.