Latin America's Largest Online Travel Site Despegar.com Receives 10.3 Million US$ in Second-Round Financing - French ACCOR Group One Of Investors
Strategic Investment from Yahoo! Inc., Leading Venture Partners and Travel Giant Accor Group Highlights Despegar.com's Growth Strategy
Also included in the second-round financing are additional investments from existing partners which include: Merrill Lynch Global Emerging Markets Partners, Newbridge Andean Partners L.P. (an affiliate of Texas Pacific Group and ACON Investments) and the Accor Group, the largest owner/operator of hotels worldwide and the co-owner of Carlson Wagonlit Travel, the second largest travel agency in the world.
Despegar.com and Yahoo! recently joined forces to deliver online travel services to the Latin American market, enabling people to research travel plans, check flight availability, compare prices and book their airline, hotel and car rental reservations online. The alliance resembles the services that Travelocity TVLY provides to Yahoo users in the U.S.
Sonae's relationship with Despegar's began in September 2000 when Sonae selected Despegar.com as its booking engine technology provider over several European IT firms. Sonae's investment decision confirms Despegar's execution capacity and provides a platform to further expand business opportunities.
"As a pioneer in telecommunications and multimedia services, Sonae is pleased to partner with Despegar.com and to participate in this financing round," said Teresa Simoes, managing director for Sonae's VC fund. "Despegar's leadership in the highly successful Internet travel category combined with its proven and savvy management team represents a very strong value proposition."
"In today's market, securing financing from companies such as Yahoo! Inc. and Sonae, firmly establishes Despegar.com as a leading e-travel player in the region," said Federico Fuchs, CFO and co-founder, Despegar.com. "The continued support we are receiving from current and new investors, from the travel industry, the Internet space and the financial community, underscores the strength of our business model, the successful implementation of the first stage of our business plan, and our leadership in the region."
Despegar.com Stays on Track with Aggressive Growth Plan
Since closing its first-round of financing of $10MM in May 2000, Despegar.com has kept close reigns on its growth strategy meeting and exceeding sales projections and maintaining an on-time schedule of new market and product roll-outs.
With its presence well established in nine countries – Argentina, Brazil, Chile, Colombia, Mexico, Uruguay, Venezuela, Spain and the U.S. --, the new capital investment will be used to continue to enhance the Ibero-American users online travel experience, as well as for product development, expansion of the IT platform, call centers, and growth of the corporate travel services solution.
Based on the company's 25% growth rate per month, Despegar.com expects sales volumes to reach $80MM by the end of the year, with 40% of those sales coming from its corporate travel service, Despegar Corporate. The company expects to turn cash flow positive by mid-2002.
Despegar is currently the only provider of a customized Internet based travel solution for companies in Ibero-America, with over 50 companies using the product across the region. Despegar has recently signed an agreement to test the corporate travel platform with United Airlines' clients as a valued added alternative for corporate booking services.
To grow its leadership position in the region, Despegar.com has successfully leveraged its unique product offering, size – it is the only online travel site for Spanish- and Portuguese-speaking communities available in nine countries – and registered use base to attract key business partners including Telefonica and Bell South in WAP applications, Compaq Latin America, United Airlines, Sabre, Amadeus and most recently, Yahoo! Inc.
According to Jupiter Research, the leisure online travel market in the U.S. is estimated to reach $28 billion by 2005. Jupiter also estimates that the corporate managed online business-travel market will reach $33 billion in 2005, up from $4.4 billion in 2000. Other research firms such as Forrester Research and Deloite & Touche estimate that 80 percent of the companies in the United States are expected to introduce travel e-procurement systems by 2001.
About Despegar.com
Despegar, which means "take off" in Spanish, is the leading online travel site dedicated to Spanish and Portuguese-speaking communities worldwide. Miami-based Despegar.com currently operates in 9 countries throughout Latin America, Spain and the U.S., employing more than 100 professionals. Despegar.com offers travel-related services, including access to over 500 airlines, 50 major car rental companies, 50,000 hotels and hundreds of vacation packages around the world.
Despegar Corporate () has launched its B2B solutions in Argentina, Brazil, Chile, Colombia, Mexico, the U.S. and Spain. After six extensive months of needs assessment, product development and testing, Despegar Corporate's booking tool now serves more than 50 customers, establishing the company as a B2B technology pioneer in the region.
About the Investors:
Sonae Group
is the telecom/media arm of Sonae SGPS. It comprises business in the Mobile, under the brand Optimus, Fixed, under the brand Novis, Internet, a Portal under the brand Clix, and a series of Vortals in the B2B and B2C markets, and Media, both in newspapers and the radio sectors. In late 2000 it created a CV fund (Move on) to invest in companies that have a strategic fit with its activity.
Sonae SGPS is the leading privately controlled non-financial Portuguese group, its main other areas of activity are in : Retail – Modelo Continente is the number one retailer in Portugal and number three in Brazil Wood Pannels – Sonae Industria is the world leader in the sector Shopping Centers – Sonae Imobiliaria is the Portuguese leader, and currently expanding in Europe and Brazil Tourism – Torralta resorts and travel agencies
Accor Group
Accor has 130,000 associates in 140 countries, Accor is the European leader and one of the world's largest group in travel, tourism and corporate services with two major international activities:
- Hotels: 3,500 in 90 countries, travel agencies, restaurants and casinos;
- Services to corporate clients and public institutions: each day 12 million people in 31 countries use a broad range of services (Food Vouchers, People's care, Expenses management, Social Services, incentive/Events) engineered and managed by Accor.
Merrill Lynch Global Emerging Markets Partners
Merrill Lynch Global Emerging Markets Partners L.P. is a private equity fund managed by Merrill Lynch Global Partners Inc. and designed to make significant equity investments in businesses located in emerging markets countries.
Newbridge Andean Partners L.P.
Newbridge Latin America and Newbridge Andean Partners (together, "Newbridge") are private equity funds formed to make direct equity investments in companies operating in Latin America. Founded by the U.S.-based investment firms, Texas Pacific Group, Blum Capital Group, and ACON Investments, Newbridge has offices in Buenos Aires, Rio de Janeiro, Mexico City, Washington, D.C., and Phoenix and operates through co-managers in Venezuela, Colombia, Peru, Ecuador and Bolivia. With over $500 million in committed capital and 15 investment professionals, the two partnerships seek to acquire significant equity interests in companies in which they invest to enable their principals to play a meaningful role in the development and implementation of strategies aimed at maximizing shareholder value.
