Wednesday, November 07, 2007

Fastbooking raise €35m in fast cash

Online retailer, hotel booking engine provider, marketing firm and reservation connectivity service Fastbooking has raised Euro35mm in venture funding (thanks to m-travel). Money has come from 3i and Edmond De Rothschild Investment Partners (EdRIP). In exchange the two firms gain a 62% stake, valuing Fastbooking at Euro45mm.

Fastbooking operate B2C businesses through Fastbooking.com and a network of destination/SEO targeted sites under the collection of brands known as Only-Recommended-Hotels.

According to the Fastbooking corporate site, the group processed a volume of more than Euro206mm in 2006 in hotel bookings, representing 1.5mm room nights from 3,500 hotels. What is unclear bout their results is what the split in this volume is between B2C/direct to consumer activity generating commission levels that a retailer would enjoy and B2B reservation services which are presumably of lower margin compared to the volume processed. My sense is that the vast majority of the volume is B2B processing given the valuation of the deal.

4 comments:

Anonymous said...

I know Messrs Thierry and he is into fastcash. They tried to sell there business many times and failed. Now they are in fancy new offices and have a huge selection of programmers they are aiming to redevelop and push the marketing angle.

Good luck

Sam I Am said...

Wow, lot of money for a company I have never heard of. Those VC better know what they are doing...

Tim, when you mention "My sense is that the vast majority of the volume is B2B processing given the valuation of the deal." does that mean you find the valuation too low for if they were generating this volume off B2C?

Let's say (hypothetically of course :) ) one was generating 20 million EUR volume off of accommodation bookings directly to consumers. Would you value them at higher than 10% of this deal or lower? Purely based on the volume of this and not considering any other factors of which there are of course many!

Tim Hughes said...

Sam - It took me a while to draft this post (in fact saved it overnight while I thought about it). In many drafts I put down reasons and calculations to justify the statement you have pointed to. I eventually took out all of that analysis and commentary because it involved touching too much on companies that I have inside knowledge about and have committed not to blog on. However let me give you some comparisons. Look at the publicly traded hotel only companies such as Wotif.com in Australia and Hotel.de in Germany. Their valuations (especially Wotif.com) would support a much higher number for Fastbooking if the 200mm plus turnover was generating revenues at a margin range of 10-15%. Also a matter of looking at the acquisition prices of ActiveHotels and Bookings back in 2003/4. Should be said - and answers the second part of the question that price/value of a company is based on the earnings of a company - not the top line turnover. Need to look at growth rates, margin growth and earnings growth.

Sylvain said...

Hello Tim: Just wanted to say that i3 and EdRIP bought the stake owned by Mediatel,
Part’com and a few other business angels.

This transaction provides an exit for current shareholders (Mediatel and Part'com) but does not bring fast cash for Fastbooking...