Despegar Files for $100 Million IPO and Expedia Could Benefit From Its Growth
Skift Take
Despegar is on track to attract a $1 billion valuation. That's impressive. But its newish CEO needs to pivot the business away from a reliance on selling airline tickets, which are becoming less profitable for his firm by the day.
Online travel agency Despegar — whose name comes from the Spanish verb that means "to take off" — has filed for an initial public offering on the New York Stock Exchange.
Despegar said it hopes to raise $100 million. But Renaissance Capital, an IPO research firm, estimates the company will raise $300 million. This range of estimates suggests that the market will place a $1 billion or greater valuation on Despegar, making it Latin America's first online travel unicorn.
The company, which claims to be the largest homegrown online travel agency in Latin America, has not set an initial share price or a date for the IPO.
Hedge fund Tiger Global owns 57.3 percent of the company as of Thursday, before the offering. General Atlantic Partners owns 5.4 percent. Expedia is another key holder of equity. The company's five founders and a few other investors also own shares.
In February Roberto Souviron left his 18-year job as the top boss. He is no longer on the board of directors, either.
Tiger Global has installed a new CEO, Damián Scokin, an executive who worked for 11 years at the consulting firm McKinsey. From 2012 to 2015, Scokin served as CEO for LATAM’s international business unit, where he was in charge of leading the merger and integration process of LAN Airlines, LATAM Airlines Group’s predecessor and the biggest airline in Chile, and TAM Linhas Aereas, one of Brazil leading airlines.
As majority owner, Tiger Global chose to remove the startup's founding CEO from day-to-day operations. The firm was not happy with the delayed process of ramping up to an IPO, says Argentinan news publication Reportur.
Expedia's Int
