New SiteMinder CEO Sankar Narayan believes it can be the new Xero
Via afr.com
Outgoing Xero chief operating officer Sankar Narayan believes hotel guest acquisition technology company SiteMinder has all the makings to be as successful as Xero, as he prepares to take on the top job in January.
Launched in 2006 by Mike Ford and Mike Rogers, SiteMinder provides the core technology that has allowed booking websites such as Booking.com and Agoda to flourish.
Servicing 30,000 hotels, ranging from major chains to bed and breakfasts, SiteMinder connects a hotel's back-end system to those of the booking websites, allowing all systems to be updated simultaneously if a reservation is made on a third-party website. It also provides recommendations on pricing.
In 2013 it became the first Australian investment for Facebook and Netflix investor Technology Crossover Ventures, raising $US30 million, and local fund Bailador has also previously backed the business.
Mr Narayan, who will begin as chief executive early next year and will work alongside Mr Ford who will remain in the managing director role, told The Australian Financial Review he had the opportunity to help SiteMinder become a big global tech company.
"It will be one of the big success stories to come out of Australian tech," he said. "There's only a handful of Australian companies being really successful on the global stage and SiteMinder has a great global footprint and a great base to start."
Key priority
Mr Narayan has been at Xero since October 2015 and started as chief financial officer, before also taking on the COO job in February 2017.
Xero shareholders and analysts have gotten to know Mr Narayan well, with him supporting co-founder Rod Drury on investor calls, as well as chief executive Steve Vamos until he resigned earlier this year and Kirsty Godfrey-Billy became CFO in October.
Mr Narayan said his major priority in joining SiteMinder was on scaling the company internationally.
"Xero and SiteMinder are quite similar actually. You have two companies scaling up and going global ... and you need an operating model that has a local flavour in each region," he said.
"Like Xero, SiteMinder also reaches a lot of small businesses. We have a lot of small bed and breakfasts as well as big chains and that's where the strength of the SiteMinder model is because it doesn't just rely on a few big enterprise clients.
"We are looking to expand into more enterprise clients, but it's the small hotels which provide the backbone of the business."
SiteMinder, which has 600 staff, is the largest player in the market with 80.6 million hotel reservations made annually thanks to its technology, generating $35.8 billion. But it competes with businesses such as TravelClick and RateTiger and it also faces competition from regional players in each of the geographies.
Future plans
While it counts 30,000 accommodation providers as customers, it considers its total market to be about 1 million hotels and bed and breakfasts. Its next milestone is to hit 50,000 hotels.
Mr Ford said he decided to bring on board a CEO because he was struggling with switching between running the business day-to-day and focusing on product strategy with a longer-term view.
"I looked at how to change that so that we could execute on near- to medium-term growth, while also being able to look to the future," he said.
While Mr Narayan has experience working for listed companies, having also been chief financial officer for Virgin and Fairfax Media, Mr Ford said he was not brought on board with the intention of leading the company to an initial public offering, although admitted his experience would be advantageous if SiteMinder does go down this path.
The company has also brought on board former 3P Learning CFO Jonathan Kenny, further boosting its executive team's experience running listed companies.
"The reason is not because we want to IPO, but because we want executives that can take us to the next stage of our business," Mr Ford said.
"We are quite a substantial business now and we need executives that bring that operational discipline ... it will be beneficial if we do list, but that's not the prime driver."