Interesting to see Expedia CEO Dara Khosrowshahi (pictured) chosen as the CEO of Uber.
Just looking through the narrow lens of how corporate venturing aids a company’s innovation toolset and his experience could be helpful.
One of its portfolio company, Argentina-based Despegar, filed for an initial public offering on the New York Stock Exchange this month and Expedia was also on the news recently, and the subject of our GCV Analytics teardown (in expectation of just such a move :-), as it invested $350m in Indonesia-based travel and accommodation booking platform Traveloka.
Founded in 1999, Despegar runs an online flight and travel accommodation booking platform that focuses on Latin America and particularly Brazil, where it operates as Decolar. It made a $17.8m profit in 2016 from $411m in revenue which was provided by about 4 million customers. Expedia paid $270m for a 16.4% share of Despegar in March 2015 as part of an outsourcing partnership agreement that made it Despegar’s preferred accommodation provider.
Founded in 2012, meanwhile, Traveloka provides travel booking services for customers in Indonesia, Thailand, Vietnam, Malaysia, Singapore and the Philippines, and serves more than 200,000 routes across the world. The company had also received backing by e-commerce firm JD.com, hedge fund manager Hillhouse Capital and venture capital firms East Ventures and Sequoia Capital.
Following on from successes, such as eLong in China, and Dara has a storied track record in using tools to keep its global edge. After Uber effectively gave up in China on its own investment and retrenched in other areas, such insights might be useful as it builds on relatively strong Uber’s second quarter financials uncovered by news service Axios.
Expedia has traditionally invested strictly in accommodation and travel, as the GCV Analytics bubble chart shows. The accommodation and travel space itself has seen an increasing interest by corporate investors in recent years, as the bar chart below indicates. While in 2013 GCV Analytics had tracked merely 8 corporate-backed rounds in this space, last year the number of such rounds was 26, i.e. over three time more. Through the first half of 2017, we already reported 19 deals, which suggests that the number of deals in this realm is likely to grow even further by the end of the year.
Analysis by Kaloyan Andonov, GCV Analytics for the Global Corporate Venturing subscriber newsletter on 21 August.
