SiteMinder Gets Funding Boost as Financial Titan BlackRock Bets on Hotel Tech
Skift Take
To call a company the best-capitalized hotel tech startup might seem like pointing out the tallest leprechaun. But while SiteMinder serves only about 36,000 hotels out of a million worldwide, new funding from cash-rich investor BlackRock could fuel the hotel connectivity startup's growth substantially.
The race for the next $1 billion travel technology company is on. Hotel tech startup SiteMinder has just received an investment that placed a more than $750 million ($1.1 billion Australian) valuation on it.
BlackRock, the world’s biggest money manager, led the round in the Sydney-based startup, which helps hoteliers get guests online. The companies didn't disclose the size of the investment. BlackRock did not claim to be either the largest shareholder or a majority owner. Other investors include AustralianSuper, Ellerston, and Pendal Group.
'We began the fund-raising journey targeting $70 million ($100 million Australian)," said SiteMinder CEO Sankar Narayan. "But, due to the interest and demand in the business, we ended with well above that."
Before this round, the company had raised approximately $50 million ($70 million Australian) in venture capital from investors, including TCV (Technology Crossover Ventures) and Bailador Technology Investments. It launched in 2006.
For the year to June 30, 2019, SiteMinder, via its holding company Online Ventures, reported revenue of $67 million ($96.9 million Australian), according to filings. So the company's valuation is roughly 10 times last year's earnings.
Its business model takes a slice of a slice of a transaction. That's much less than the fat commissions that, say, Booking.com charges. The startup seems to be competing on price.
For example, SiteMinder's revenue for the year represented about 0.2 percent of the roughly $35 billion ($50 billion Australian) in gross bookings it handled for hotels last year
