The tech business Siteminder may be getting closer to an initial public offering (IPO). Investors can already indirectly access exposure to Siteminder through tech investor Bailador Technology Investments Ltd (ASX: BTI).
What is Siteminder?
Siteminder is a hotel booking business. It is one of the world leaders in connecting hotels to online distribution channels for bookings. The company says that there are 35,000 hoteliers globally that are already using Siteminder.
It offers a number of services such as channel manager (including revenue insights), a hotel booking engine (including rate parity insights), competitive and market insights and hotel website design.
Bailador says that Siteminder generates more than $100 million of annualised recurring revenue through a subscription revenue model with a gross margin of more than 70%. It is reportedly triple the size of the nearest competitor and has an addressable market of 1 million hotels.
That revenue comes from more than 160 countries, with 80% of revenue from international markets. It has a skew towards the leisure market, which was described as more robust.
Bailador says that Siteminder exhibits resilient characteristics of a software as a service (SaaS) revenue model and is valued as a premium SaaS business.
How has COVID-19 affected the business?
COVID-19 has been tough on ASX travel shares that have been impacted by restrictions and limited demand over the last year and a half. Businesses like Webjet Limited (ASX: WEB), Flight Centre Travel Group Ltd (ASX: FLT), Sydney Airport Holdings Pty Ltd (ASX: SYD) and Corporate Travel Management Ltd (ASX: CTD) continue to be impacted.
However, Bailador says that performance has been managed prudently during COVID-19. Despite significant difficulties for the travel industry, Siteminder has experienced flat revenue over the 12 months to 30 June 2021.
Bailador believes that the hotel booking business is positioned for "rapid growth" as travel volumes increase.
Is Siteminder about to IPO?
Siteminder is one of Bailador's largest holdings. At the time of the ASX tech investor's FY21 result, it said that IPO preparation was underway, including ensuring appropriate governance for a public company.
According to reporting by the Australian Financial Review, Siteminder has just finished a funding round of at least $100 million. It is not rushing to IPO, but it is expected that an IPO will occur in FY22. Many of the investors in that funding round were investors that Siteminder already had an association with.
The AFR said that the Siteminder CEO Sankar Narayan noted the business has continued to invest in its technology and offering. Mr Narayan also said that Siteminder is aiming for further global expansion, to add on to its recent European expansion, particularly in German-speaking countries.
However, referring to the timing of a potential IPO and whether it related to the return of travel, Mr Narayan was tight-lipped. He said:
For a lot of reasons I can't talk about that, I can't actually talk about an IPO or any IPO plans.
