Financial filings reveal how well deals specialist Secret Escapes was performing before the pandemic struck and how much venture capital backing it received during the crisis to stay afloat. The figures hint at how the company's recovery this year may play out.
Travel deals specialist Secret Escapes survived the pandemic with the help of an approximately $74 million (£55 million) Series E equity fundraising from all its existing shareholders in May 2020, according to new financial filings.
The crisis risked the existence of the UK-based travel flash-deals startup, which had previously been a darling of venture capital. In October 2017, Secret Escapes had announced a Series D round of $178 in equity and debt investment. Its management later said they hoped to take the company public in 2021.
Accounting statements filed with the UK Companies House on February 11 (embedded, below) revealed how critical the financial help was in 2020.
Secret Escapes, which offers discounted travel offers to people who sign up for free memberships, faced a crush of customer service requests as the mass cancellations of early 2020 slammed the business.
The equity injection enabled the startup to keep its customer support centers “fully operational throughout the period, with colleagues redeployed from across the business,” the filings said.
Since then, the company has improved workflows, and it has added a rebooking functionality to better handle customer service.
The Boom Year of 2019
Like many travel companies, Secret Escapes — a group of brands that include Slevomat, Zl’avomat.sk, Travelist, TravelBird, and Empathy Marketing’s Pigsback — is benchmarking the pre-pandemic year of 2019 as its ideal to meet or surpass in 2022.
In 2019, the Secret Escapes group generated revenue of approximately $160 million (£118.3 million) on gross bookings of about $882 million (£652.9 million).
That meant it enjoyed a “take rate”, or effective commission, of 18 percent. For comparison, its take rate was higher than what the 11 largest publicly held online travel conglomerates, such as Booking Holdings, Airbnb, Expedia Group, and Trip.com Group, enjoyed in late 2021, according to a recent Skift Research factbook.
The company’s geographic diversification was underscored by how it drove 84 percent of its commission revenue from outside the UK.
In 2019, Secret Escapes Group reported adjusted earnings before interest, taxes, depreciation, and amortization of approximately $14 million (£10.6 million).
In 2020, the pandemic crushed the startup’s finances. The group suffered a net loss of about $65 million (£48.2 million) on adjusted revenue of approximately $77 million (£57.7 million).
During the peak of the crisis, it benefited, as did most companies, from indirect support from the UK and other governments for salaries for employees.
Since 2020, the company has strengthened its balance sheet.
By 2021, the startup saw a partial rebound in gross bookings, though it didn’t disclose details.
“In the period following the gradual lifting of restrictions across its different markets, trading reached nearly 80 percent of 2019 levels,” the company’s financial statements said, noting that it had generated “an overall positive cash flow across 2021.”
As of December 31, 2021, it held $102 million (£76 million) in cash, liabilities of $97 million, and $85 million in debt facilities.
The company’s executive declined to be interviewed. When asked about its months-long spate of hiring, including 28 currently open job postings in London, a company spokesperson said it’s “looking to accelerate growth” and that it’s “well-positioned to return to growth.”
The company’s accounts, partly audited by Ernst & Young, are embedded, below.
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Photo credit: AX The Victoria Hotel in Sliema, Malta, recently listed rooms via online travel startup Secret Escapes. Source: AX The Victoria Hotel.