After more than a decade of helping to manage the friendly skies, it seems that mobile travel assistant WorldMate is coming in for a landing at its final destination as an independent company. Carlson Waglit Travel (CWT), one of the largest travel agencies in the world, has agreed to acquire WorldMate in an all-cash deal, TechCrunch learned today. According to sources with knowledge of the deal, the purchase price is about $20 million.
Founded in 2000, WorldMate began its life as a software vendor for Palm, but is today known as the maker of mobile apps for iOS, Android, BlackBerry and Windows Phone that allow travelers to plan trips, book hotels and car rentals, and organize itineraries. The company is currently headquartered in San Francisco with R&D offices in Israel, the company’s home turf.
After raising $8 million as one of BlackBerry Venture Fund’s first outside investments in 2008, the company changed its name from MobiMate and began to hit its stride. By 2010, the company had collected 5 million users and began partnering with big names like American Express and TravelPort, along with inking its first deal with CWT.
At the time, CWT was looking to begin pushing more aggressively onto mobile platforms and social networks, and its partnership with WorldMate marked the first step in that process. Usurprising in retrospect, but it was at about this time that acquisition rumors first started to surface, with RCRW Unplugged and Calcalist reporting that the partnerships had led to buyout talks with TravelPort and Amex, with the Israeli newspaper claiming that offers were as high as $60 million.
WorldMate founder Nadav Gur “vehemently denied the rumors,” according to RCRW. A source with intimate knowledge of the matter informed us that a board member leaked the rumors to the press in an attempt to drive up the price. That, plus the fact that its revenues were at around $6 million in 2010, and it’s not exactly a huge shock the deal didn’t pan out.
Since then, WorldMate has largely flown under the radar, which is somewhat surprising considering the company today reports that its apps have been used by 10 million travelers to date to plan their trips, with a total of 3.7 million registered users, 9 billion miles and 2.9 million itineraries managed this year.
Not only that, but WorldMate was early to market, pivoted successfully multiple times and seemed to be hitting the right notes by beefing up its hotel booking service, offering users automated suggestions for hotels that they may like based on their past usage and personal data, launching APIs — including support for 20 languages — low marketing spend, and what have apparently been increasing revenues thanks to white label/API offerings.
To that point, the startup makes money through a number of different channels. It started off mostly focused on subscription, but has since expanded to lead generation for hotel and car rental properties like Expedia, white label versions of its apps, licensing its APIs and advertising.
Granted, it was through these revenue channels that WorldMate has managed to weather the changes in mobile platforms and OSes, adapting also by focusing on incremental changes. Of course, while the business has remained solid, it never took off, either. As in every other case with startups, there was a lot of optimism and cheerleading, and obviously one (or multiple) areas weren’t quite as rosy as they’ve been made to seem.
What’s more, the $20 million to $25 million acquisition price is small peanuts for CWT, which according to its 2011 numbers, operates in more than 150 countries, has 20K employees and saw $28 billion in aggregate sales.
While the business travel management giant gets an established mobile channel through which to distribute its security solutions, alerts, crisis communication, destination intelligence among others, one source intimately familiar with the deal said that it “wasn’t exactly a homerun” for WorldMate, which raised a total of $15 million in venture capital.
The deal is expected to close later this week, with an official announcement coming in the next few days. We’ll update when we learn more.