SiteMinder minimized the pandemic's hit to revenue by selling new tools to help hotels with payments and digital marketing. No wonder Fidelity International wanted to invest ahead of the startup's likely initial public offering in 2022.
Global financial titans have taken an interest in supporting the next travel technology company likely to go public. Hotel booking technology startup SiteMinder said on Tuesday it had received $74 million ($100 million Australian) in a Series D investment round. Fidelity International, the asset management titan, led the round.
The investment comes after BlackRock, the world’s largest money manager, in January 2020 took a sized equity stake in the Sydney-based startup, which helps hoteliers get guests online.
SiteMinder has begun preparations toward seeking regulatory approval to go public. The latest funding was at an enterprise valuation “in excess of” around $733 million (about $1 billion Australian),” according to financial filings.
Neither Fidelity nor BlackRock are the majority owners.
Before this round, the company had raised approximately $120 million in capital from investors, including AustralianSuper, Ellerston, Pendal Group, and TCV (Technology Crossover Ventures).
Some of the company’s early backers, such as Bailador Technology Investments, remained invested, but they didn’t add capital. Bailador’s carrying value, for example, remained unchanged at $60 million ($82.5 million Australian).
The pandemic slammed the company’s hotel customer clients. The startup generated approximately $73 million (about $100 million Australian) in its fiscal year through June 2020. That was a revenue decline of about 6 percent year-over-year, which was somewhat modest given the double-digit revenue hits suffered by its hotel customers.
The company avoided a worse revenue hit by boosting its sales of two new products. One is a service to help hotels advertise in metasearch channels such as Trivago. The other is a hotel payments program, which includes the capability for hotels to process guest payments from within SiteMinder’s software. The two products have had higher adoption rates than any of the company’s other offerings in the last year. It saw a 40 percent increase in the number of customers using its payments and other transaction-based products, it said.
“After joining SiteMinder’s capital raise in January 2020, at a time where we could not have foreseen the events ahead, what we have seen is SiteMinder show tremendous agility, resilience, and innovation,” said George Batsakis, a senior portfolio manager at AustralianSuper. “The unprecedented impacts of the last 18 months have proven the importance of easy-to-use technology platforms for hotels.”
CEO Sankar Narayan leads the company. It launched in 2006. Its flagship products help hotels distribute their rooms to online and offline agencies more effectively. Some other tech vendors with overlapping services include Amadeus Hospitality, Accor’s D-Edge, Cubilis (Stardekk), eRevMax’s RateTiger, HotelRunner, RateGain’s Dhisco, Oracle Hospitality, Hotel Spider (Tourisoft), Sabre’s SynXis, Vertical Booking, Cloudbeds’s Myallocator product, DerbySoft, AxisRooms, Hotelogix, Mews’ Base7booking, Wubook, WebHotelier, TravelLine, Omnibees, and Nightsbridge.
Given the commoditization of channel management, the company’s growth has depended on expansion into services beyond channel management that are higher-margin.
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Photo credit: SiteMinder's top executives talk at the company's Sydney headquarters. From right: CEO Sankar Narayan and Co-Founder and Chairman Mike Ford. The hotel software startup based in Sydney has closed a pre-IPO round of funding, led by Fidelity, the asset manager. SiteMinder