StudentUniverse Buys Hostel Booking App WeHostels to Improve on Mobile

StudentUniverse announced its acquisition of hostel booking app WeHostels today.

The student travel giant plans to keep WeHostels running as a separate app and brand, but will use the mobile acumen of the WeHostels team to improve its own mobile products, WeHostels co-founder and CEO Diego Saez-Gil tells Skift.

Although the terms of the deal have not been disclosed, Saez-Gil says it included combination of cash and stock and that "investors are walking away very happy."

The WeHostels Android and iOS apps allow mobile users to find and book hostels worldwide from their mobile phone. The mobile-only service also shares details on other travelers staying at each hostel.

WeHostels was named the “Most Innovative Travel Startup of the Year” at the PhoCusWright Conference in 2012, and today's announcement was timed to coincide with the start of PhoCusWright 2013.

The startup was founded in 2011 and raised a $1.2 million seed round from a group of investors including Ventech, Quotidian Ventures, CAP Ventures, Fabrice Grinda, and Dave Lerner in February 2013. The company claims 200,000 people have used the app to plan a trip since launch.

The team will be responsible for improving StudentUniverse's mobile strategy with a focus on flights.

Saez-Gil says WeHostels wants to make booking a flight as easy as booking a hostel, which only takes three swipes on the startup's mobile app. Their focus will be improving the UX and UI of mobile flight booking as well as revamping and relaunching StudentUniverse's Android and iOS apps.

WeHostels' 8-person team will all join StudentUniverse, but keep their headquarters in New York City instead of moving to StudentUniverse's headquarters in Boston.

StudentUniverse was founded in 2000. With $20 million in private backing and 110 employees, it now runs one of the largest student online booking sites worldwide. By validating travelers' ages, the site offers steep discounts secured through partnerships with airlines, hotels, and rail companies.

"We're super excited to join the company, says Saez-Gil. "I think it can IPO at some point in the next few years."