The long saga of Deem looks to have come to an end. One has to wonder if the investors who shelled out to fund the company for the last 20 years will be happy with the return, though.
Enterprise Holdings, the privately owned car rental giant, will acquire corporate travel provider Deem, which has pivoted away from broader technology solutions in recent years to focus on ground transportation services. The value of the deal, which is expected to close in the first quarter of 2019, was not disclosed.
The two companies have partnered since 2011, with Deem powering the car rental company’s booking platform for small- to medium-sized businesses. Enterprise took a minority stake in Deem in 2016, as well. Requests for interviews with both parties were not returned.
The plan is for business as usual to continue for Deem, with no major executive or strategy changes.
Enterprise owns the Enterprise Rent-A-Car, National Car Rental, and Alamo Rent A Car brands and is something of a rarity as a privately-owned, global car rental company.
Deem, which was previously known as Reardon Commerce, is something of an oddity in the corporate travel space. Since emerging in 1999, the company has raised $536.1 million in funding from a variety of sources, according to Crunchbase. Its most recent round in 2016 was led by PointGuard Ventures for $34 million. It currently claims to have more than 50,000 corporate customers.
A lot of drama has surrounded Deem in the last few years. Founder Patrick Grady stepped down in 2016, and the company moved to sell off some of its technology and focus more squarely on ground transportation solutions instead of overall travel management.
Rumors circulated about internal strife and a lack of innovation leading the company to stagnate. The company also had various vestigial divisions like financial services software that have been shuttered or sold off, the result of developing technology for nearly two decades. The new focus was on selling solutions to the clients it already has, integrating with whatever travel management service they use, instead of just selling them into the overall Deem platform.
“We sold off [our back office car service technology] because we felt that the most value we could bring to the industry was not about accounting for rides, it was about increasing the amount of demand we could provide to operators because we have this huge travel platform,” John Rizzo, Deem’s CEO, told Skift last year.
From Enterprise Holdings’ perspective, the move makes a lot of sense. As car rental companies look to the future of mobility, being able to drive demand with corporate customers in ridesharing and other areas has become vital. By locking in deeply with corporations, Enterprise can continue its strong growth going forward.
“Deem’s combination of intellectual property and tech talent represents a significant opportunity for Enterprise Holdings to further enhance and expand our portfolio of services,” said Greg Stubblefield, executive vice president and chief strategy officer for Enterprise Holdings, in a statement.
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Photo credit: A photo of the Deem offices in San Francisco. Deem