Is hotel reservation technology company Siteminder close to an IPO?


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Technology company Siteminder may be getting closer to an initial public offering (IPO). Investors can already indirectly access exposure to Siteminder through a technology investor Bailador Technology Investments Ltd (ASX: BTI).

What is Siteminder?

Siteminder is a hotel reservation company. It is one of the world leaders in connecting hotels to online distribution channels for reservations. The company claims that there are 35,000 hoteliers worldwide who already use Siteminder.

It offers a number of services such as channel manager (including revenue information), hotel booking engine (including rate parity information), competition and market information. and hotel website design.

Bailador says Siteminder generates over $ 100 million in annualized recurring revenue through a subscription revenue model with a gross margin of over 70%. It would be three times the size of the closest competitor and have an addressable market of 1 million hotels.

These revenues come from more than 160 countries, including 80% of revenues from international markets. It has a bias towards the leisure market, which has been described as more robust.

Bailador claims that Siteminder exhibits the resilient characteristics of a Software as a Service (SaaS) revenue model and is considered a premium SaaS company.

How has COVID-19 affected the business?

COVID-19 has been tough on ASX travel stocks which have been affected by restrictions and limited demand over the past 18 months. Companies like Limited webjet (ASX: WEB), Flight Center Travel Group Ltd (ASX: FLT), Sydney Airport Holdings Pty Ltd (ASX: SYD) and Corporate Travel Management Ltd (ASX: CTD) continue to be impacted.

However, Bailador says performance was handled with caution during COVID-19. Despite significant difficulties for the travel industry, Siteminder recorded stable revenues over the 12 months to June 30, 2021.

Bailador believes that the hotel reservation business is positioned for “rapid growth” as travel volumes increase.

Is Siteminder about to go public?

Siteminder is one of Bailador’s largest holdings. At the time of FY21 results for tech investor ASX, he said preparations for the IPO were underway, including ensuring proper governance for a public company.

According to reports from the Australian Financial Review, Siteminder has just completed a fundraising round of at least $ 100 million. This is not about rushing for the IPO, but it is expected that an IPO will take place in FY22. Many investors in this funding round were investors with whom Siteminder was already associated.

The AFR said Siteminder CEO Sankar Narayan noted that the company has continued to invest in its technology and offering. Mr Narayan also said that Siteminder is aiming for further global expansion, to complement its recent European expansion, especially in German-speaking countries.

However, referring to the timing of a potential IPO and whether it was related to returning from the trip, Mr Narayan was low key. He said:

For many reasons I can’t talk about it, I can’t actually talk about an IPO or IPO plans.

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