Hotel metasearch engine Room 77 announced last night that it has closed $30.3 million in Series C financing with participation from a brand new investor Expedia. The company’s existing investors also participated, 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. This brings Room 77’s total capital raised to $43.8 million.
As most readers will know, I love the great work that the team behind Room 77 are doing – they are fundamentally challenging the way consumers search and shop for hotels and instantly search hundreds of travel sites at once to find the best hotel at the best price. The company combine this with some great technology to enable a unique shopping experience (see previous posts here). Since launching its hotel metasearch platform a year ago, Room 77 bookings and revenue have accelerated dramatically. In the past nine months alone, the company has driven hundreds of thousands of room nights through its marketplace, recording significant month-over-month growth.
By combining fast and comprehensive search technology with unprecedented service, Room 77 claim they are proving it helps users save time and money whilst getting them a great room. Based on internal analysis of more than five million hotel searches, Room 77 uncovered at least one lower price for travellers in two out of three searches, averaging $72 per stay. The real asset to me is Room 77’s “Room Concierge” service, which leverages the company’s proprietary room data, such as blueprints and simulated RoomViewSM technology, to help travellers get in a great room when they book through Room 77.
“We believe metasearch is an increasingly important model and complementary to our travel transaction businesses,” said Dara Khosrowshahi, Expedia, Inc. President and Chief Executive Officer. “The level of innovation and depth of content at Room 77 excites us about its future role in this important customer acquisition channel.”
COO of Room 77 Kevin Fliess commented: “Room 77 is obsessed with helping travellers uncover the best hotel deal anywhere in one fast and easy search. Our investors recognize the inherent value of metasearch and the importance of rapid innovation in this category, and we’re delighted to welcome Expedia, Inc. to this esteemed group. As recent events in this category demonstrate, hotel metasearch represents a massive market and huge global opportunity. This round will only help Room 77 grow our marketplace to help travellers around the world find great hotel deals which, in turn, drive incremental business and revenue to our hotel and travel agency partners.”
Room 77 expects to use the additional capital to grow its team with top talent; expand into new markets; increase investment in product; engineering and room-level content; and step up its marketing efforts to build a world-class brand.
When I first heard the news I immediately thought that Expedia were on the way to buying the company, or more to the point, buying the technology that Room 77 have built their business on, after all their search is far superior. But I was somewhat pleased to read that Expedia do not hold a majority stake in Room 77 and the company is retained by founder Brad Gerstner. Congratulations Room 77 – we look forward to seeing what 2013 brings!