room77
469 days ago
 

Room 77 takes $30M injection, Expedia involved, as meta arms race heats up

This afternoon hotel metasearch engine Room 77  revealed that it has closed $30.3 million in Series C financing with participation from new investor Expedia, Inc.

Expedia isn’t leading the round. A number of investors put up the same cash, including Sutter Hill Ventures, General Catalyst Partners, Concur Technologies, Felicis Ventures as well as Expedia’s founder Rich Barton, former Expedia CEO Erik Blachford and Spencer Rascoff, CEO of Zillow.

Expedia does not have a majority stake. That honor is retained by founder Brad Gerstner.

This round brings Mountain View startup’s funding total to $43.8 million.

Expedia is clearly interested in metasearch, given that this move comes hot after  its purchase of European metasearch site Trivago. It’s yet another countermove to Google’s push into metasearch with its Hotel Finder and Flights products, and Priceline’s purchase of Kayak, the leading US metasearch player.

In a press statement, Dara Khosrowshahi, Expedia, Inc. President and Chief Executive Officer said:

“We believe metasearch is an increasingly important model and complementary to our travel transaction businesses. The level of innovation and depth of content at Room 77 excites us about its future role in this important customer acquisition channel.”

Concur Technologies, a previous investor, has tossed more money into the pot, though it is not technically a leader. In a statement, John Torrey, Executive Vice President, Corporate Strategy for Concur, said:

“We’re building a travel ecosystem that dynamically responds to the needs of business travelers, the companies that they work for and the suppliers that serve them. Through The Perfect Trip Fund and the Concur T&E Cloud, we’re bringing some of the best innovations like those from Room 77 together to revolutionize business travel.”

A big day

It’s a day of validation for Kevin Fliess, GM & VP Product, who has persevered despite some critics claiming Room 77 has had little traction in the marketplace. Fliess plans to use the additional capital to hire employees, enter markets, and boost its marketing.

It’s another day of vindication for founder Brad Gerstner, who is also the CEO of Altimeter Capital. He’s had a Midas touch lately, as another travel startup that he’s been an angel investor in, Nor1, recently received a fat Series B round, which Concur Technologies also participated in.

It has only been a year since Room 77 launched its hotel metasearch platform, though it had a room-identification tool that went into beta launch earlier than that, in February 2011.

The company claims that, in the past nine months, it has driven “hundreds of thousands room nights” downstream to transaction partners, including: EAN, Expedia, Hotels.com, TravelNow, and TSP.

The company also touts “a repeat booking rate of more than 50%.”

Secret sauce

The main unique offering of Room 77 is its free Room Concierge service, which uses proprietary room data, such as blueprints and simulated RoomView technology, to help travelers choose the best room.

Also uniquely, if consumers use Room 77 itself as the agency for booking in three- to five-star hotels, they can enjoy additional assurances of getting a specific room as shown on the site’s mix of 3D illustration and photo hotel blueprints. What’s more, the site uniquely displays special rates, like AAA and senior discounts, side-by-side with standard rates at many properties.

All-star cast

In related news, Jim White, Managing Director of Sutter Hill Ventures, will join Room 77′s board. White joins illustrious company.

The startup has an all-star cast of supporters, such as board members Hugh Crean, the CEO of Farecast who led to that company’s purchase by Microsoft; strategic advisor Sam Shank, the founder of Hotel Tonight; technical advisor Luke Wroblewski, the famous digital design guru; and vice-president of partner relations Melissa Beauchamp, who previously helped launch the hotel product at Hotwire; Joel Cutler has been responsible for General Catalyst Partners’s previous investment in the company. (See the full, impressive team list, here.)

 
 
Sean O'Neill

About the Writer :: Sean O'Neill

Sean O’Neill is a London-based reporter for Tnooz. He's also a regular contributor to BBC Travel.

Follow him on Twitter, Google+, and his personal site .

 

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  1. Mike Thiel

    Kevin: Impressive progress since we met at ITB! Your site looks good and the traffic looks like it has boomed. It pays to play with the businss model.

     
  2. Chris Patridge

    Congrats Kevin, a most impressive growth curve and some real heavy hitters onboard!

     
  3. Pete Meyers

    Interesting stuff and congrats to Room77 on the deal and their kryptonite stockpile.

    Still amazed that HotelsCombined continues to fly under the radar, though. Seems like their independent status ripens by the day.

     
    • Sean O'Neill

      Sean O'Neill

      Good point about HotelsCombined, Pete. Who knew that metasearch would be so popular in 2012/2013.

       
  4. Ahmed Bhuiyan

    Steve’s comment was hilarious, but Kevin’s comeback equally hilarious.

    Congrats to you and the team Kevin!

     
  5. Steve

    Nice to see them progressing with the fundraising, however the more you raise the more the investors will want to see traction. Thus far Room 77 is virtually unknown around the world in the majority of markets. Agree with Steve that an additional $30m isn’t going to be much of a marketing budget.

    Have always loved the concept of Room 77 but from a travel consumer point of view they made too big a noise about the roomview and not enough about getting the right price to users and breaking down experience barriers in online hotel booking (that’s what most consumers really care about).

    Be great to see them get traction globally though as they are at least trying new things. Reckon that would end in acquisition… Expedia lining themselves up nicely with their share which could put off other potential buyers (Steve?).

    As a side note, how could you not mention Rasmus in the all star cast? The godfather of PHP and an absolute legend. Impressive to have him on board…

     
    • Sean O'Neill

      Sean O'Neill

      No disrespect to Rasmus, a true legend. I just couldn’t copy and paste the entire list of collaborators.

       
  6. Travis Katz

    Congrats, Kevin! Exciting stuff.

     
  7. Sean O'Neill

    Sean O'Neill

    Thanks for the comments!

     
  8. Steve Hafner

    Brad – congratulations. $30M is a knife to a gunfight though :)

     
 
 

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