Mondee is venturing down an unbeaten path by targeting travel influencers, and it seems to be making investors a little uneasy.
Skypass is focused on selling wholesale travel to international consulting firms and small- and medium-sized businesses, as well as vacation packages and humanitarian travel. The company has corporate clients in the U.S., Europe, and India, including Mumbai-based multinational conglomerate Tata Group. Mondee provides travel agents access to a digital wholesale marketplace, as well as software products to manage their business.
Mondee earlier this year released an upgraded version of its platform to include features such as a shopping cart and an integrated AI-powered trip planning and booking assistant. Travel agents who use the platform can also share access with customers, who can then book trips at wholesale prices while the agent still earns a commission.
With the latest deal, the goal is that Skypass’s clients will use the Mondee platform for corporate bookings, and also that those clients’ employees use the Mondee platform to book personal travel, according to a message from Orestes Fintiklis, Mondee’s chief corporate strategy and business development officer.
Mondee said it plans to add features to its platform, including payments tools and supplementary services, that may target Skypass’s clientele.
The acquisition also gives Mondee access to Skypass contracts for discounts on flights, hotels, and cruises.
Skypass had gross revenue of $45 million and adjusted EBITDA of $4 million in 2022, Mondee said.
The $15 million acquisition price included $3 million cash, with the rest paid via Mondee stock priced at $10 per share. Pending achieving growth targets, the deal includes the potential for additional Mondee stock.
Mondee stock hit an all-time low of just over $6 on Tuesday afternoon, down nearly 40% year to date. The company went public in July 2022 via special purpose acquisition company, or SPAC, with a market capitalization of approximately $740 million and a stock price of $11.05 per share.
Mondee acquired Brazil-based Orinter in January for $40 million, the first deal in what Fintiklis said would be a two-year acquisition streak. Two acquisitions followed in May: Mexico-based Consolid Mexico Holding for $8.9 million and Brazil-based Interep for $8.9 million.
Increased Marketing Investment
Mondee has been in a period of transition since the pandemic. Executives last quarter decided to allocate an additional $20 million over the course of this year on marketing related to the recently released upgraded tech platform, according to chief financial officer Jesus Portillo during an earnings call on Tuesday.
A major portion of that is going toward marketing to social media influencers.
The idea is that influencers would share a Mondee app link with followers, who would then book travel at wholesale prices while the influencer earns a 1% commission, Fintiklis told Skift in July. Those followers can get $10 to invite their own friends, and the influencer earns a 1% commission on those bookings as well.
That $20 million includes about $1 million last quarter for marketing and hiring. New hires included a global head of AI, chief human resources officer, and 14 marketing staff.
Net revenue for 2023 fiscal year is expected to be between $245 million and $250 million, which would be a 55% increase compared to 2022. The company expects adjusted EBITDA to be between $25 million and $30 million, an increase from $16 million in 2022.
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Tags: artificial intelligence, earnings, generative ai, influencers, marketing, mergers and acquisitions, mondee, online travel, online travel newsletter, social media, travel agencies, travel agents, travel influencers
Photo credit: Mondee acquired its fourth company of the year. Peter H / Pixabay