Travel booking app Hopper boosts valuation to $5 billion in secondary sale – TechCrunch
Hopper, the mobile travel booking startup and app that allows users to book flights, hotels, cars and, more recently, short-term home rentals a la Airbnb and VRBO, has seen a pace of growth. Rapid growth in the wake of Covid-19 travel restrictions have eased over the past year, with 70 million downloads to date and over $2 billion in travel sales last year. Now the company is preparing for its next steps. TechCrunch has learned and confirmed that the company raised $35 million in a secondary stock sale that values the company at $5 billion.
In some context, the Canadian startup was valued at just over $3.5 billion just five months ago when it raised $175 million in a Series G funding round.
The secondary sale, a source said, was aimed at employees, giving them cash “so they don’t have to wait for a potential IPO.” Buyers of the shares included Drive Capital, Stack Capital Group (which also independently announced its stake in the investment) and existing investors. (This list includes Goldman Sachs, Inovia Capital, Omers, Citi and others.
There’s no date yet for when it might go public, which is one of the reasons for holding a secondary sale to donate cash now. But Hopper confirmed that was the plan.
“We are looking at an IPO in the future, but we are head over heels and focused on innovating on behalf of our clients, so we don’t have a concrete plan or timeline on that,” Frederic said. Lalonde, CEO, to TechCrunch in an email. “There are still a lot of things we want to do before we make a public offering.” Specifically, he said the company is focused on growing its margins and new business areas, including the short-term home rentals it launched last month; its new B2B platform Hopper Cloud; and international expansion.
A spokesperson for Hopper described this latest transaction as “purely secondary”, and a source confirmed that Hopper is not currently raising new outside funding, having brought in some $345 million last year. (Before Series G, Hopper raised a Series F of $170 million in March 2021.)
Covid-19 dealt a huge blow to the tourism and travel industries, with people unable or unwilling to travel, the closure of many hospitality venues and leisure attractions, and governments restricting how people could get move in an effort to contain the spread of the pandemic.
But a number of companies in these verticals have found ways to reposition their businesses – for example, companies selling “experiences” in different destinations have shifted to running virtual experiences on video; others have set up more services to help their partners and suppliers better manage the pandemic themselves. And then, as travel and tourism started to return, the original business funnels of those companies also made a comeback.
This was the case for Hopper, who said her revenue grew more than 300% in 2021 compared to 2020 – growth that she’s sustained and in fact improved, with monthly revenue now 375% higher than that. they were before the pandemic.
Some areas are doing particularly well. The company said its share of North American air travel sales was up 300% from before the pandemic began. (It doesn’t say what its actual share is now or in the past. Other competitors in the space include other aggregators like Booking.com and Travelocity, Opodo, Expedia, SkyScanner, and airline direct sales themselves.)
Price freeze and rebooking guarantee, two of the additional services it offers to airline ticket buyers, account for 70% of Hoppers’ total airline revenue. Hopper describes them as “travel fintechs” and they are a key way for the company to earn better margins on what is otherwise a very commoditized business.
Another reason for Hopper’s performance was the launch of Hopper Cloud, which was the company’s own effort to diversify its business by creating a larger B2B platform for companies it was already working with in its platform. B2C aggregation, and now represents 15% of the company’s turnover. (Hopper Cloud enables travel agencies to integrate Hopper’s travel services and its “fintech” products; partners include Capital One, Kayak, Marriott, Amadeus, Trip.com and MakeMyTrip.)
Hopper, as we understand it, is no longer raising outside capital at this time.