Fornova, a startup providing technology to help hotel managers drive more direct bookings, has raised $17 million in a series B round.
Deutsche Telekom Capital Partners led the investment.
Waypoint Capital and previous investor JAL Ventures also participated in the round. Fornova previously raised at least $2.5 million.
Fornova, based in Yokneam Illit, Israel, sells Web-scanning technology and connectivity solutions. Fornova tells hotels how to set rates at the optimal price relative to what their competitors are charging, and it takes potential demand into account. The company also uses its claimed data analytic prowess to help transmute data into marketing campaigns that attract customers and persuade them to book directly with hotels.
Fornova says its secret sauce is its mathematical approach to analyzing digital content. The company, founded in 2008, says it has discovered an automated method of interpreting structured Web data in a visual way.
Since March 2016, the company pivoted to concentrate on applying this approach to the hotel sector specifically. It uses its analytical method for scanning, extracting, and aggregating information to help hotels with their marketing and guest acquisition work.
Fornova chief executive Dori Stein claims that the company has signed up more than 13,000 hotels, plus “a couple thousand” hotels that use just its connectivity service for third-party distribution through channels such as metasearch websites. That’s the same number of hotels it was touting last summer.
Stein says it has been providing its services in a limited way to the corporate offices at Marriott, NH, and Premier Inn.
Stein says that his company’s software allows it to provide more robust advice to hotels on marketing and rate-setting than what competitors offer.
By July, Fornova aims to have a new product that would enable chains to make Fornova’s services easily available to franchisees at the property level. Skift was not able to speak with executives at those hotel brands to understand their expectations — or the technical and commercial hurdles — by publication time.
Fat and unhappy market
There are at least hundreds of thousands of hotels in the world, depending on how you define “hotel,” and a majority of them are independent. Many of the independents perceive that they are being squeezed by the cost of commissions for third-party distribution, such as the reservations that come through online travel agencies. That perception makes many of them interested in software solutions that promise to generate more direct bookings.
Given the potential market, Fornova joins several other startups, including Triptease, Travel Tripper, HeBS Digital, and Seekda (among others), in having a chance at achieving considerable growth in sales.
Venture capitalists are paying attention. For instance, Fornova’s funding comes only a month after Triptease, a London-based hotel tech startup, raised a $9 million Series B, to scale up its software platform. Triptease already helps more than 17,000 hotels in more than 40 cities boost the number of customers who book directly through the engines on their websites and apps.
Considering the buzz in this sector, it wouldn’t be surprising if one of the major travel technology companies in this sector, such as Sabre, Amadeus, Travelclick, or Shiji, might either develop similar services or make an acquisition.