First Free Story (1 of 3)Join Skift Pro
Reputation management and hospitality analytics firm ReviewPro is trying to raise nearly $10 million in funding as it broadens its data products and expands into restaurants, Skift has learned. This is happening as it also recently laid off seven of its employees, about 10 percent of its total workforce.
Skift obtained Barcelona-based ReviewPro’s investor deck, outlining its growth strategy, which entails expanding into reputation management for restaurants, and the launch of new data tools such as a revenue optimizer, hotel assessment reports, and guest satisfaction surveys.
ReviewPro, according to this November 2013 presentation, saw 47% revenue growth to $3.46 million in 2013, and counted nearly 6,000 hotels as customers. ReviewPro projects 2014 revenue at $6.1 million, which would be a whopping 76% leap — if it actually happens.
After ReviewPro recently fired these seven employees, its current workforce stands at 68. Explaining these layoffs, Friedlander said: “As a fast-growing company, it is necessary to regularly assess our needs and the performance of our team, especially given the significant growth of the team over the last year. In the spirit of ensuring the highest caliber of employees, we recently let go of seven people.”
“These individuals were let go because they were not meeting expectations related to performance,” Friedlander claimed, adding that ReviewPro hired some other people and expects to expand its employee rolls in 2014.
The company, he says, “has been approached by a number of interested parties,” although ReviewPro has decided to raise money to scale its growth.
ReviewPro’s founders own a 51.1% stake in the company, private investors control 29.7%, and Active Venture Partners holds 19.2% of the shares, the presentation states.
Founded in 2008, ReviewPro competes with companies such as Revinate, TrustYou, Medallia, Market Metrix, RateGain, and Olery, among others, and previously raised around $6.7 million in funding, including $4.1 million from Active Venture Partners last July.
There certainly has been a lot of competition in the reputation management of late, but what is the market opportunity?
Friedlander acknowledges that the big hotel chains are locked up with their chosen reputation management tools, but argues there is a huge opportunity among small groups and independent hotels especially as ReviewPro branches out beyond its core reputation management tools, and into data intelligence and analytics.
“If you look at the big chains, they have the tools,” Friedlander said. “We are very good at getting out to the long tail.”
Friedlander says ReviewPro “continues to rapidly grow its international footprint of small- and medium-size hotel groups.”
There certainly is a lot of jostling for clients in reputation management these days. For example, Friedlander says ReivewPro last year signed on Kempinski Hotels, Riu Hotels, and The Ritz London, taking their accounts away from competitors, although he declined to identify those rivals.
All of the major players, though, could seemingly compile their own lists of customer wins and losses.
One competitor huffs that ReviewPro has “commoditized” the market in an unsustainable way.
Friedlander denies that charge, saying that average prices industry-wide “possibly” have decreased.
ReviewPro, he says, charges $25 per month for its basic corporate dashboard, $65 per month for its standard reputation management product, and $130 monthly for the “plus” version. Friedlander says ReviewPro is “not seeing price erosion” in its advanced tools.
ReviewPro sees an opportunity in reputation management for the restaurant industry, which has seen the rapid growth of user-generated content in the form of Yelp reviews and others, much like the hotel industry did earlier with consumer reviews on TripAdvisor.
Friedlander says that ReviewPro’s prime focus in restaurants at the moment is geared toward hotels that have restaurants, and the company will gradually build up a dedicated sales force to target eateries.
So is the reputation management space getting overcrowded?
Friedlander says it “depends on what segment of the space you are talking about.”
Apart from the major chains, ReviewPro, he says, sees huge opportunities in the many thousands of hotels who still don’t use reputation management tools, as well as in data and analytics for the hospitality industry.