Hotel SaaS SiteMinder joins unicorn club

Hotel SaaS SiteMinder joins unicorn club

The Australian tech scale-up scene is getting points on the board early this year after a recent equity raise lifted the valuation of SiteMinder to $1.1 billion.

The accommodation guest acquisition software outfit processed 105 million bookings for more than 35,000 hotels in 2019.

Founded in 2006 by Mike Ford (pictured) and Mike Rogers (pictured left below), Sydney-headquartered SiteMinder recorded more than $100 million in annual recurring revenue last year of which 80 per cent came from abroad.

Investors have taken notice of the company's success, with funds managed by BlackRock attracting capital from the likes of AustralianSuper, Ellerston and Pendal Group (ASX: PDL) in a raising that was finalised this month.

"With ever-increasing complexities online amid rising consumer choice, SiteMinder fills a necessary void for hoteliers everywhere," says Ford, who is also chairman of the group.

"We are delighted to have such a wealth of expertise and experience among our shareholders, to walk the exciting path forward with us."

The additional capital will be used to fuel SiteMinder's growth and innovation, namely through accelerated go-to-market strategies and increased investments in R&D led from Sydney.

Meanwhile, the Software as a Service (SaaS) company will also further its international expansion with its current global team of 900 staff set to grow, with offices also in Bangkok, Dallas, Galway, London and Manila.

SiteMinder's technology is available in eight languages and supported with customer service in a further three, and is currently used in 160 countries.

CEO Sankar Narayan (pictured right below) says there has never been a more opportune time to capitalise on an online accommodation industry that has grown 11 per cent per annum over the last 15 years and still represents less than 50 per cent of all accommodation bookings.

"As the global landscape for hotel technology becomes increasingly fragmented, and remains largely unpenetrated with connected technology, we couldn't be more thrilled with the quality of new partners we have gained to further cement our position as the global market leader, now and into the future," says Narayan.

"This investment is a strong endorsement of our growth ambitions to continue building the world's largest and most open guest acquisition platform for hotels."

BlackRock's head of capital markets for the Asia Pacific Michael Dennis says Australian private markets providing a compelling investment opportunity.

"We are excited about this investment and look forward to SiteMinder delivering on its growth ambitions and extending its market leadership," he says.

Early investors of SiteMinderincluding Bailador Technology Investments (ASX: BTI), Les Szekely of Equity Venture Partners, and TCVremain strong supporters and shareholders of the company.

"The shift in consumer engagement is changing the structure of online travel," says David Yuan, general partner at TCV and SiteMinder board member.

"We wanted to find a technology provider that could power a better consumer experience and empower hoteliers to benefit from this shift. We searched globally and found the bestSiteMinder in Australia," says Yuan. 

"In working together over the years, we've seen SiteMinder emerge as the global powerhouse in the category, and an important franchise in online travel."

This morning Bailador told the ASX it had entered into a definitive agreement to sell $10 million worth of stock in SiteMinder as part of the recent equity raising.

"We are delighted to see strong investment demand for SiteMinder from such high-quality investors globally; it's a testament to the tremendous progress and global scale that the team has achieved to date," says Bailador co-founder and managing partner Paul Wilson.

"SiteMinder has been a terrific investment for our shareholders and we strongly believe there is significant valuation upside to come. We look forward to continuing our close working relationship with the SiteMinder Board and executive team to achieve this outcome."

"Bailador was one of SiteMinder's earliest institutional investors and their contribution as both shareholders and members of our Board over the years has been invaluable," adds Ford.

Joining the unicorn club

It has been around 10 months since an Australian company achieved unicorn status, with Melbourne-founded and now Hong Kong-based Airwallex hitting the $1 billion valuation mark thanks to a capital raise by DST Global last year.

However, in the lead-up to Christmas the Sydney Morning Herald reported $26 million of Airwallex's funds had been frozen by Hong Kong police over suspicions of alleged fraud.

Questions have also been raised in currency broker circles over the kind of commissions and growth potential Airwallex would need to justify such a large valuation, with SMH revealing it only achieved a revenue of $14,803 for its Australian operations in FY17 and a loss of $806,195.

Airwallex has denied requests from Business News Australia for updated financial figures.

The fintech's competitor TransferWise recorded annual revenue of £179 million (AUD$339 million) through charges on approximately £48 billion (AUD$91 million) worth of transactions in FY19. The Estonian-founded business was valued at US$3.5 billion (AUD$5 billion) in May last year.

Other Australian unicorns include graphic design company Canva and digital marketplace group Envato.

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