The COVID-19 pandemic ground travel and tourism to a halt, but as those sectors pick up speed again, so too are the more promising startups in them raising money to keep up. Today, a startup called Mews — which provides a cloud-based hotel property management platform with tools covering reservations, payments and more — announced that it has raised $185 million in a Series C round of funding giving the company a post-money valuation of $865 million.
Co-led by Kinnevik and the Growth Equity business within Goldman Sachs Asset Management, the round also included new backers Revaia, Derive Ventures and Orbit Capital; as well as previous investors Battery Ventures, Notion Capital, Salesforce Ventures, Thayer Ventures and henQ. The raise is mostly equity with a small amount of debt, founder and president Richard Valtr said in an interview. Columbia Lake Partners is providing the debt.
Mews are streets (for example, in London) full of usually small houses or flats converted from horse stables for bigger houses nearby. Ironically, though, Mews the startup is not that small at all. In the year that travel “came back” post the peak of COVID and the various restrictions imposed on people moving around, Mews saw revenues grow 174%, with gross payment volume in the period up 227% and now standing at $2.3 billion. It has customers in 70 countries, 3,253 hotels in all.
Its customers include big chains spanning from five-star through to the most basic accommodation, including Accor and the Youth Hostel Association, as well as a number of smaller groups and independent hoteliers, all of which turn to Mews both for specific tools to manage reservations, payments, guest services, analytics and shifts for hotel workers, as well as a marketplace of 600 apps for users to build one-stop dashboards that integrate any number of other apps that a hotel might be using in its operations (for example accounting, sales or CRM software), a little like a Toast or a Shopify for the hospitality industry, Valtr said.
That is also, these days, leading the company to working with other kinds of property management groups looking to provide residents or visitors with hotel-like services — the Airbnb effect on how we live, or might want to live, these days.
“We think of ourselves as the platform on which businesses in our vertical are run,” he said. “We take a broad brush approach with our ambitions. Mews nominally looks after hotels and hospitality, but that could be hostels or Airbnbs or services for people in mixed-use real estate. Longer term, we feel that what is considered commercial or residential is melding. This is the direction all real estate is going. What is happening post-pandemic is that more are realizing they want to live more of their travel life more of the time.”
The last time Mews raised money was 2019, a $33 million round that it raised in part to re-orient itself to working on product and building out its tech to differentiate itself from the other property management software players on the market. It turned out to be a fortuitous shift, Valtr said: As the pandemic hit, the company was head-down on its own internal transformation, emerging just as hotels were also looking to invest in better and newer systems during their own down time. That may well be a sugar-coated spin on a period that was virtually dead for the travel and tourism industry, but ultimately the growth Mews has had more recently speaks to its momentum right now.
This latest funding will be used for, essentially, more of the same: more tech investing and to expand globally, with some optional M&A too.
“Richard, [CEO] Matthijs Welle, and the broader Mews team have an intimate understanding of hoteliers’ needs and have taken a product-first approach to develop a modern solution in a sector ripe for disruption,” said Akhil Chainwala, investment director at Kinnevik, in a statement. As cloud adoption in hospitality accelerates driven by more complex guest needs and rising costs, Mews is best positioned to rebuild the sector’s digital plumbing. We are excited to welcome a fourth travel investment to our portfolio and look forward to supporting Mews in the next phase of its journey.”
What’s been surprising is not so much that Mews is seeing a surge in business, but that investors are backing it readily right now, given how tricky it’s been for other sectors, and given the current investment climate and the contraction specifically in the hospitality industry.
“Closing a large round in this environment speaks to the tremendous growth and future potential of Mews,” said Kirk Lepke, managing director in the Growth Equity business within Goldman Sachs Asset Management, in a statement. “Hoteliers have experienced a lot of challenges over recent years, driving increased demand for cloud-native platforms, like Mews, to help them modernize, improve the guest experience, and create efficiencies through smart automation. With their open architecture and fully integrated payment capabilities, Mews is heavily relied upon as a mission critical solution.”