Secret Escapes raises $60 million from Google Ventures and others
Huge round in the bank for flash hotel sale site Secret Escapes – securing $ 60 million from a list of venture capital heavyweights.
The Series C investment brings the total amount raised so far by the UK-based company to $ 80 million.
Existing investors Index Ventures and Atlas Venture have been joined by lead group Google Ventures and Octopus Investments for the latest injection of capital.
The company claims to have sold almost two million room nights in four years on the back of 19 million subscribers to its database.
CEO Alex Saint says the company will use the round to fund its expansion in the US and elsewhere around Asia, in a bid to replicate the success of the company in the UK.
So far the company has launched in 13 countries.
The $ 60 million (last sizeable round – $ 8 million – was in 2012) is likely to raise a few eyebrows given the length of time since a raft of flash sale sites secured any significant funding rounds.
Saint tells Tnooz he sees the company being a “multi-billion dollar turnover business” by 2020, having “been lucky enough to prove that we can execute our model in multiple territories with success”.
“We want to grasp that opportunity sooner rather than later and each territory takes a significant amount of investment in the early years before it hits profitability (which the UK did in 2013) so when you stack a bunch of new markets on top of each other they need a pretty sizeable cheque to execute properly.
“We also wanted a bit of headroom to explore acquisition opportunities and to look at some exciting innovations (can’t say what at this stage!).”
Still, Secret Escapes is arguably one of the fortunate ones from that flurry of flash sale brands which emerged in 2011-2012.
Some credit must go to its decision to head into the competitive but sometimes fruitful world of TV advertising, a move mirrored by very few online travel brands in recent years.
Saint admits the marketing is the biggest cost for the company, but says one its successful strategies has also been its ability to execute both marketing and supply at the same time.
But of those flash sale sites that have disappeared quietly into the night, Saint says:
“It’s a fine line between success and failure and we’ve seen many people fail by small margins.
“Success seems to be pretty binary in our space, so the very few big players will totally dominate and it becomes increasingly tough for people to enter the market.
“I also think it helped that we had a very clear brand positioning from day one.”