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Online travel agency Despegar raised $332 million this year, having listed on the New York stock exchange in September. Along the way, the Argentine company became Latin America’s first unicorn, or start-up worth more than $1 billion, in online travel. As of Friday, the markets placed Despegar’s valuation at $1.86 billion. In turn, Expedia has a 14 percent stake in Despegar, and is prohibited from purchasing more than 35 percent of Despegar’s shares within three years of the IPO unless Expedia makes a tender offer. Under the latter scenario, Expedia could acquire Despegar if Expedia agreed to purchase more than a 75 percent stake in the company. It had $1.12 billion in third quarter gross booking volume, up 32 percent, year over year. Its total transactions of $2.3 billion in the quarter represented a 25 percent jump. Net income, though, fell 22 percent to $11.2 million. Despegar has a more substantial presence in South America than Expedia and its rivals Priceline Group and Ctrip, on average among the countries. Despegar has operated for18 years, building up local relationships. It now serves 20 Latin American countries. In Latin America, only $22 billion of travel is bought online today, which investment analysts at Citi believe is merely 34 percent of the potential if consumers switch away from bricks-and-mortar agencies. The 34 percent average is well below European and U.S. online travel penetration of 51 percent and 48 percent, respectively, according to Euromonitor estimates. Meanwhile, Despegar may be in a shopping mood in 2018. Expect an acquisition or merger in the New Year. Viajanet, Submarino Viagens, Viajala, Voopter, and other companies will be curious to see what moves the regional star makes. Read original article |
