A small stake in Australian accommodation tech outfit SiteMinder, believed to be less than 2%, has changed hands for $5 million, a transaction that now values the the Sydney-based company at $290 million – almost 750% more than it was worth just four years ago.
It’s an astonishing but not unexpected result for a company that is anything but an overnight success and now claims to be the world’s biggest channel manager based on customer numbers and revenue, though TravelClick would probably dispute this.
Company founders – the hard-working, low-key duo of Mike Ford and Mike Rogers – have taken 10 long years to reach this point and there’s no sign of either slowing down as SiteMinder continues its rapid growth.
The valuation revelation came as one of its major investors, Bailador Technology Investments (BTI) sold a chunk of its 12.9% holding in SiteMinder, a stake it had valued at $25 million.
In a deliberately vague statement, BTI said only that it has “agreed to sell down a small portion of its holding for $5m after accepting a third-party offer at a valuation 45% above its holding value.”
It has not responded to requests for clarification of the transaction.
However based on available information, TravelTrends.biz estimates that BTI sold around 1.8% of the company leaving it with just over 11% of SiteMinder, a stake now valued at $31.3 million.
SiteMinder, best known as a channel manager but moving into new areas, currently has 20,000 customers in 160 countries.
It’s grown client numbers by 25% in the last six months of 2015, according to BTI stock exchange statements.
Despite these impressive customer acquisition numbers, revenue growth is slowing. In the 13/14 financial year SiteMinder’s revenue grew 80% to $19.9 million, while recording an EBITDA loss of just under $2.5 million.
This loss was “lower than the year to 30 June 2013”.
For the 14/15 financial year, SiteMinder’s revenue growth had decelerated to 50%.
Based on this, SiteMinder’s 14/15 revenue would have been around $30 million.
No other light has been shed on its overall performance although it’s safe to assume SiteMinder is still sticking to the agreed business plan of chasing growth over profit in the short-term.
“SiteMinder has profitable Unit Economics, which allows it to intentionally enter a loss making period in order to acquire more customers in a shorter period with the intention of achieving greater profitability over time,” BTI said in its late 2014 prospectus.
Bailador first invested in SiteMinder in April, 2012, when a fund associated with the company bought 14.3% of the business for $5.6 million.
That valued SiteMinder at just over $39 million. Just four years later another investor believes it is worth at least $290 million – an increase of almost 750% in just four years.
Yet the re-valuation has done nothing for Bailador’s share price, which is trading below its 2014 listing price.
Bailador is also an investor in Rezdy, which has adopted a similar subscription-based business model for the tours and activities sector.
Paul Wilson, co-founder of Bailador and SiteMinder’s Chairman, has not yet responded to requests for comment.
SiteMinder co-Founder and Managing Director Mike Ford said he didn’t have any details on Bailador’s transaction.
“All I know is SiteMinder’s shareholder register has not changed at all so any deal done was directly between Bailador and a 3rd party and did not involve SiteMinder or any change to Bailador’s shareholding on our register,” Mr Ford said.
He said SiteMinder has rapidly evolved from its beginnings as a channel manager with continued platform development a major priority.
“We started life as a channel manager but we have evolved from individual products into a unified platform suite geared at allowing hotels to sell more successfully online.
“We have over 9000 hotels on our booking engine as an example.
“Following close on the launch of the Canvas website product in November 15 we plan on releasing a brand new product at the end of calendar Q1 2016, and are committed to continuing building out the product and functionality in our platform.”