Connecticut startup Kayak has raised $223 million in venture capital and employs 58 people to build and grow its travel search site. Its chief competitor, San Francisco based Mobissimo, has raised $1 million and has just 15 employees. Mobissimo also became profitable last year, and the company doesn’t have to raise more money unless it’s to fuel faster growth or acquisitions. It’s also clear even from a cursory comparison of the two sites that Mobissimo is trying harder than Kayak to help you find exactly the flight and hotel you are looking for. Kayak is largely similar to other travel search sites – enter where you want to go and get back results from a number of providers, sort by price, etc. But Mobissimo has implemented a number of just plain smart features that provide the kind of travel options that you usually need a human operator or travel agent to get to. In addition to normal search results, for example, users also see options for the lowest priced non-stop fares, the lowest priced alternative dates, and the lowest priced business class fares (without doing new searches). And if there’s a train between the two destinations, Mobissimo will show those results along with the flights – you may get there faster and cheaper that way, and you’d never think to search for train schedules separately. And even better, the service will look for related destinations and show you the lowest fares there, too. For example, a search for flights to Poland may show other Eastern European destinations if the prices are a lot lower. Or if you are looking for flights to an airport near a beach, Mobissimo will show you other flights to other beach destinations, perhaps thousands of miles away (and skiing, and wine regions, etc.). It’s very hard to find these kinds of travel options with online searches. If you are flying to Warsaw, you just don’t think to do a search to Prague, too, to see if it’s vastly cheaper. And if all you want to do is find a quick getaway to gamble, play golf, drink wine, go to a beach or just about anything else, you can search primarily by activity, too. Mobissimo also has widgets on the site that pull in third party information about the destination. Weather, Flickr photos and (soon) travel guides are included in the left sidebar. All of this → Read More
Discount travel site Kayak has acquired rival SideStep for $200 million. This story was set to be announced tomorrow but word is leaking all over the place after Sidestep CEO Rob Solomon told his company employees the news at an all hands meeting. This is a two part deal. Kayak raised $196 million in a new round of financing from their existing investors (Sequoia Capital, General Catalyst Partners and Accel Partners), two of SideStep’s existing investors (Norwest Venture Partners and Trident Capital), new investors (Oak Investment Partners and Lehman Brothers Venture Partners) and debt lenders (Silicon Valley Bank and Gold Hill Capital). Prior to this new round, Kayak had raised $27 million in capital. Kayak subsequently acquired SideStep. Terms are not being disclosed, but we are hearing that the deal was for $180 million in cash. An additional $20 million that SideStep holds in cash is being distributed as well, making the total deal size around $200 million. SideStep and Kayak are the two leaders in the discount travel search space (along with Mobissimo and Farecast). Kayak is reportedly doing around $50 million in yearly revenues, compared to SideStep’s $35 million. This marks quite a turnaround for SideStep. Two years ago the company was on the ropes. Founding CEO Brian Barth had been ousted. Rob Solomon, previously Yahoo’s SVP Commerce, joined as CEO and replaced 40 of the company’s 50 or so employees. In the last two years he grew the company from $14 million to $35 million in revenue, and turned it profitable. SideStep has raised $32 million in venture capital. Twenty or so of SideStep’s seventy five employees will stay on at Kayak over the long run. Rob Solomon and a few others will remain for a sixty day transition period and will then be back on the market. Update 1: Worldwide Comscore numbers for the four companies are below. Kayak says that there is less than 10% overlap between SideStep and Kayak users. Update 2: I just spoke to the Kayak and Sidestep executive teams for a more complete briefing. The combined company will have 60ish employees once the merger is completed and the 60 day transition period ends. The company is very profitable on the combined revenues. In addition to affiliate fee from sales, SideStep does a large display advertising and email marketing business, which Kayak lacks. Total ticket sales for Kayak are around $2.5 billion/year. → Read More
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