Hotel booking startup HotelTonight is going public.
CEO Sam Shank hopes to launch an initial public offering by late 2017, Bloomberg reported. The company was last valued in 2013 at $300 million, but some analysts say that its bookings and growth rate could make for a $400 to $500 million IPO.
The past year has been a tough one for the startup. Faced with tight-fisted venture capitalists who balked at the company’s finances, including the $2.5 million spent each month, the startup made some major changes to become profitable. The company has cut staff by 20 percent and reduced annual infrastructure costs by 40 percent, or $500,000, over the past 12 months.
The company reports that it became profitable in April and took in $25 million in bookings per month of the last quarter. The following month, Shank announced plans to go public.
“Once we got to profitability it became clear that’s our next path,” he said.
Still, some analysts are skeptical that the company can make a substantial mark among competition like Priceline and Expedia, which each take in more than $55 million in gross bookings per year.[Bloomberg] — Kathryn Brenzel