September 14, 2021

AFR: Tech unicorn bides its time with IPO after raising $100m

Via afr.com


By Paul Smith, Technology Editor

Unicorn hotel booking software company SiteMinder has closed a $100 million funding round, adding Fidelity International to its roster of big-name backers, as it continues to bide its time for an anticipated initial public offering on the Australian Securities Exchange in the current financial year.

Chief executive Sankar Narayan said the company had kept up investment in its technology platform during a pandemic that had initially appeared to threaten its viability, retaining its valuation above $1 billion and booking $100 million revenue.

The precise amount of funding raised was not disclosed, with Mr Narayan only saying it was more than $100 million, similar to its previous funding round, which it crucially closed in January last year, before the COVID-19 lockdowns.

The round comprised both primary and secondary capital, with Fidelity joining existing shareholders AustralianSuper alongside equity funds managed by BlackRock, Ellerston Capital, Pendal Group, and Washington H. Soul Pattinson.

Other existing investors in the company include ASX-listed Bailador Technology Investments, Les Szekely of Equity Venture Partners, and TCV.

Mr Narayan said raising capital without being able to travel and meet investors was a new challenge; however, most of the backers were returning investors with whom he had spoken regularly throughout the pandemic to keep them apprised of progress.

He said investors had been heartened by the company’s decision to invest in product development, despite the obvious challenges posed by the pandemic for its customer base.

Core software for hotels

It has made its name as core software for hotels that allows their back-end systems connect with various online booking sites and be instantly up to date. However in the past 1½ years it has added a number of new functions, including a payments system and a guest acquisition platform for small hotel operators.

It also introduced a partner program last November, a global hotel trend tracking tool last April and a multi-property tool in May, to simplify the management of multiple hotels for chains.

“Right from March 2020 we set the scene for the company saying how we were going to navigate out of the pandemic by not stopping any of the big projects that we had set out to do before it hit,” Mr Narayan said.

“The new products kept customers because they helped hotels by providing a lot of insight and information that took quite a bit of the uncertainty down about their business, because there has been a lot of twists and turns over the course of the last 18 months.”

In March this year, Mr Narayan told The Australian Financial Review that SiteMinder’s long-mooted initial public offering plans remained solid after it had restricted a feared pandemic wipeout to just a 10 per cent revenue drop, with a listing likely in the 2022 financial year.

However, despite the company describing its latest funding as a pre-IPO round, he refused to discuss anything further about its plans, or whether the resumption of travel in other countries, or Australia’s slip back into lockdowns, had changed the likely time frame.

“For a lot of reasons I can’t talk about that, I can’t actually talk about an IPO or any IPO plans,” Mr Narayan said.

He said the next year would involve further global expansion to follow on from recent European expansion, particularly across German-speaking parts of Europe.

AustralianSuper senior portfolio manager George Batsakis meanwhile said he believed the turmoil of the last 18 months had strengthened SiteMinder’s position in the industry, as the importance of easy-to-use technology platforms had become more apparent.

“After joining SiteMinder’s capital raise of over $100 million in January 2020, at a time when we could not have foreseen the events ahead, what we have seen is SiteMinder show tremendous agility, resilience and innovation, particularly as the needs of their customers and partners have rapidly shifted,” Mr Batsakis said.