Australian tech company SiteMinder caught the market’s attention last week, raising north of $100m from a series of blue chip investors.
The company said its funding round was led by a division of global funds management giant BlackRock. Other investors included AustralianSuper, Ellerston Capital and listed investment group Bailador (ASX:BTI).
Founded in 2006, SiteMinder’s technology provides a platform to integrate the internal management systems of individual hotels with booking sites
While it was a participant in the latest round, Bailador’s connection with SiteMinder goes back to 2012, when the fund made an initial $5m investment.
Speaking with Stockhead, Bailador co-founder and partner Paul Wilson said even back then, SiteMinder ticked a number of boxes that were central to the fund’s investment thesis.
“In terms of what attracted us, we could see there was a huge addressable market there,” he said. “Siteminder already had a strong position — they were arguably the leader, and now they’re way ahead of the market.
“We do our due diligence on investment opportunities pretty thoroughly, and in this case we spoke to dozens of customers — individual users of the product.
“In my investment career I think it was the strongest feedback I’d ever received, in terms of their satisfaction with the product. They really wanted to recommend it and were enquiring about additional services.”
At that stage the company was primarily Australia-focused, but was beginning to branch out internationally. Bailador’s investment helped it establish offices in London and Bangkok, as part of a push into Europe and Asia.
More than 80 per cent of SiteMinder’s revenue comes from international clients, from a global subscriber base of around 35,000.
Deploying the funds
The latest cap-raise gives SiteMinder an indicative paper-valuation of more than $1 billion, joining the likes of Canva and Airwallex as “unicorns” that have grown out of Australia’s tech ecosystem.
The company recently surpassed $100m in annual recurring revenues, and CEO Sankar Narayan told Stockhead he still saw room for further growth.
Narayan said the company planned to allocate the money to growing its sales in new and existing markets, as well as product development.
“It’s a big global market, but if you look at the hotel industry, it’s still under represented as far as tech is concerned,” Narayan said.
“Less than 50 per cent of all bookings are done online still — there’s still lots of manual effort and inventory uploads involved.
“So it’s a big greenfield opportunity around the world, to provide a platform for increased connectivity and introduce new products and services within that framework.”
Narayan said an example of a recent product initiative was SiteMinder’s App Store, which allowed hotel clients to access a database of different apps used to improve performance metrics such as booking margins and guest reviews.
Private to public
With some strong metrics around top-line revenue and a new group of blue-chip backers, Narayan said the company was focused on maintaining that momentum ahead of a possible listing down the track.
“We think the IPO is a strong option, but over the course of a two-year time horizon. It has to be done at the right time for the company and with the right market conditions,” he said.
For now, the company is focused on meeting its existing goals to demonstrate to the market that it can continue to drive annual revenues beyond the $100m mark.
“We have some exciting initiatives underway at the moment, and we’d like to see some early results there so we can communicate that better during the IPO process,” Narayan said.
“In the short-to-medium term, it’s about executing on opportunities available for the company itself, but keeping our eye on what a potential IPO would look like.”
And if the company does list, Narayan said SiteMinder was unlikely to follow the path of another tech unicorn — Atlassian — to US public markets.
“I think at this stage the ASX would be our preferred route. It’s become a strong home for tech stocks, with a number of exciting companies,” he said.
“I also think shareholders and the investment community have a good understanding of SaaS companies. But at the same time, we’ll keep all our options open.”