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Momondo Group, the parent of online travel booking sites Cheapflights and Momondo, has received a $130 million in a private equity investment from Boston-based Great Hill Partners, laying to rest a process it started earlier this year to find a strategic outcome for the company.
This latest investment values the company at about $210 million, which means GHP now owns majority of the company and essentially acquired Momondo Group.
Momondo Group has been mulling making acquisitions, as well, as its Cheapflights unit tries out metasearch for the first time, and expands into new markets.
Momondo.com is a metasearch company and until several months ago Cheapflights had been primarily a deal publisher, but has entered the metasearch market. In recent months Cheapflights has converted deal sites or launched new metasearch sites in New Zealand, Australia, Singapore, Philippines, Malaysia and Hong Kong.
In contrast to Momondo Group’s $210 million valuation, UK metasearch rival Skyscanner attracted a $800 million valuation in October 2013 when Sequoia Capital bought out some existing investors to the tune of around $100 million.
Asked whether the Great Hill Partners’ acquisition of Momondo Group portends a change in strategy, Hugo Burge, who stays on as CEO with a minority stake in the company, says: “We now have the support of a professional investor, who successfully grew Wayfair (took to $2 billion float) and Buscape (leader in Brazil), so we now have a whole load of expertise behind us.”
“GHP are a growth investor and we got on well with them for a reason: We both see a big opportunity for growth and want to ensure we are being aggressive enough,” Burge says. “Momondo is growing extremely fast but we hope to find ways to accelerate the next generation of the Cheapflights metasearch product, which is really starting to take shape.”
Burge says Momondo Group is open to making acquisitions to spur growth. “We now have a Head of Corporate Development and a backer who is used to doing acquisitions,” Burge says. “Yes, we are open to the right opportunities but we believe we have a fantastic organic/profitable growth opportunity, which is our primary focus and we are executing on.”
On GHP’s IPO experience, Burge says: “Our focus is growth, we do not have timing for an IPO but would not rule it out at a later date.”
Burge retains a “significant minority stake” in Momondo, the company states. In addition to his Momondo duties, Burge is co-founder and partner in Howzat Partners, which had invested in hotel metasearch site Trivago. Expedia Inc. bought out Trivago’s non-management shareholders, including Howzat Partners.