Second Round Financing For, the largest online travel site in Ibero-America has completed a $10.3 million second round of financing, that includes investments from Yahoo
and Sonae Group, a full-service European communications, Internet and multimedia company.
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.
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 provides to Yahoo users in the U.S.
Sonae`s relationship with Despegar`s began in September 2000 when Sonae selected 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. Since closing its first-round of financing of $10 million in May 2000, 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 centres, and growth of the corporate travel services solution.
Based on the company`s 25% growth rate per month, expects sales volumes to reach $80 million 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, 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.