Some interesting consolidation afoot in the travel industry: Concur, the travel and expense platform that was acquired by SAP in 2014 for $8.3 billion, is today making its own acquisition: it is buying Hipmunk, the travel search startup.
The companies are not disclosing the terms of the deal but we are trying to find out. Hipmunk had raised around $55 million since being founded in 2010, but its valuation has never been sky-high. Some clues to the value of this deal: Its last valuation as of 2014 (ahead of two small venture rounds) was around $96 million, according to PitchBook. We at TechCrunch had last heard around April 2016 that it was trying to raise money, but in a down-round. In the event, Hipmunk picked up a small $5.75 million in venture funding that very month.
Hipmunk will be integrated into Concur’s platform (which currently has search already, but as a Concur user, I can attest to the fact that it’s not that great and will be very much improved by adding Hipmunk). Concur has acquired other startups to augment its functionality, including TripIt to track and share your travel plans. It’s also invested in ClearTrip.
The deal for Hipmunk is expected to close in 2016. “We are excited to welcome Hipmunk, the innovation leader in travel search, to the Concur and SAP family,” said Elena Donio, President of Concur, in a statement. “Concur has always strived to provide the best experience for travelers on our platform and we’re confident Hipmunk will continue to delight consumers while informing the innovation agenda for our corporate clients.”
The move is interesting in light of the fact that Hipmunk’s co-founder and former CEO, Steve Huffman, has more recently been dedicating a lot more of his time to news and public conversation aggregator Reddit, an earlier startup that he founded, where he has returned as CEO.
Hipmunk has carved a place out for itself as a Kayak-style travel search portal with a catchy interface. But in a wider trend of consolidation around a few platforms — the very successful Kayak itself was acquired by Priceline in 2012 for $1.8 billion — it’s not a surprise to see Hipmunk also getting snapped up.
The startup was a trailblazer in being the first to enhance the number factors that it used to search and sort travel results for users — details like hotel location, number of stops in a journey, and so on — and some of that will be tailored to specifically cater to the business users that form the core of Concur’s customer base. But while some of those factors are now table stakes, Concur’s also acquiring talent that will theoretically have the ability (and now the resources) to develop more new features.
“Six years ago, our vision was to take the agony out of travel and travel planning,” said Adam Goldstein, co-founder and CEO of Hipmunk, in a statement. “This combination means we can do an even better job for frequent travelers, in both their leisure and business travel.”