Travel startups are receiving remarkable investor interest this year, suggesting a bit of irrational exuberance. But in Sojern's case, fundraising can be seen as recognition of a company that's taken years to build consistent, profitable growth. Its tools could be scaled up to address a multi-billion-dollar market.
Sojern, a technology company focused on helping drive more business for travel companies, has raised $120 million in a Series D round of investment.
The San Francisco-headquartered Sojern had previously raised $42.5 million in venture capital funding.
TCV (formerly Technology Crossover Ventures), a venture capital firm that was an investor in Expedia, Airbnb, HomeAway, and TripAdvisor, led the round.
The investment comes during a time of historically large funding rounds for travel technology companies, with business travel startup TripActions raising $154 million last week, attractions ticketing startup Klook raising $200 million in August, and Oyo Hotels raising $1 billion in September.
Sojern said it has had 13 consecutive quarters of profitability. In 2017, it earned a place in Deloitte’s list of fastest-growing companies for the fifth year in a row.
Does the company plan to IPO? “At this stage, all options are open to us,” said CEO Mark Rabe. “One of the benefits of our growth and profitability is that we don’t feel a whole lot of pressure to figure out our exit strategy.”
Sojern runs digital marketing campaigns for brands including Hyatt, Fairmont, and Singapore Airlines, and also for online travel companies worried about Google’s apparent efforts to compete in wooing customers. It provides its marketing services to 93 percent of public travel supplier and reseller companies who are on the Fortune 500 list, along with thousands of independent hotel properties and other travel industry players, such as tourism boards and tours and attractions operators.
Sojern began a decade ago in Omaha as essentially a boarding pass advertising business. Today it broadly helps travel brands figure out where to spend the next marketing dollar. To do that, it analyzes the ways travel shoppers interact with online information during what marketers call “the path to purchase.” It aims to provide more relevant advertising content, meaning, the proverbial matching of the “right customer to the right offer at the right time.”
Sojern also helps travel brands craft ad campaigns for social platforms Facebook and Instagram — an expanding, though still small, marketing opportunity. A year ago, Sojern acquired Adphorus, a travel tech company, and Sojern has helped companies like Fairmont Hotels test Facebook’s dynamic travel ads product.
One of the startup’s newest products is connected TV, or when people are watching video on a device that includes internet connectivity, such as watching a streaming Netflix series on an Apple TV.
In one test, the startup is working with a major travel brand that buys a lot of TV advertising to try to help it offer relevant sales pitches to travelers who Sojern knows are considering an upcoming trip and might be interested in tours, activities, and other attractions at a destination, based on their online behavior.
Overall, Rabe sees the total addressable market for Sojern as right now being about $100 billion a year. That consists of about $20 billion a year that travel companies spend on digital media to drive demand, and approximately another $80 billion a year is spent on distribution via online travel agencies and metasearch. He said Sojern could help brands be more efficient in both categories.
Sojern not alone in the so-called adtech sector, though.
Several companies offer overlapping niche services in travel digital marketing, including: Expedia Media Solutions is the digital advertising consultancy arm of the travel giant. Intent Media, based in New York, offers a platform for advertising on commerce sites that is used by many travel companies. Koddi, a bid automation platform mostly in travel metasearch that’s based in Dallas-Fort Worth, acquired a year ago the travel performance-marketing business of Criteo, a publicly held French digital advertising company that delivers online ads for brands.
Sojern now has more than 500 employees in offices worldwide. About 40 percent of them work in Omaha. As the company has scaled, Rabe has honed its workplace culture, such as by using incentive and engagement tools like Bonusly and Glint to boost satisfaction. In 2017, AdAge named Sojern as one of the industry’s best places to work and Entrepreneur magazine included it on a top company culture list.
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Photo credit: Sojern CEO Mark Rabe spoke in June at Skift Tech Forum in Silicon Valley. the company announced its latest fundraising this week. Skift