Travel marketplace Mondee recently made a big statement when it merged with ITHAX Acquisition Corp. But what does this mean for the future of travel technology?
Mondee is considered to be a market leader in travel technology, and this merger will see the company reach some impressive milestones. The marketplace will reportedly be valued at $1 billion (approx. €880 million), and will look to take the company public once the transaction is completed.
Mondee: a market leader in travel technology
Mondee was founded in 2011, and has disrupted the market by supplying travel technology and content to travel agents, as well as supplying corporate offers and subscription services. The company owns a portfolio of businesses in Rocketrip, TripPro and TripPlanet.
Mondee has earned respect for its efficient operating platform, modern outlook and valuable content for key demographics. These include those in the gig economy, as well as remote workers and travellers, the majority operating in the fast-recovering leisure segment of the travel market.
The success of Mondee is reflected in its numbers, as well as the prospect of its market. Businesswire reported that the company has a leading position in a market worth $1 trillion. It has connected a network of over 50,000 leisure travel agents to over 500 airlines. Trust in Mondee is further exemplified by its shareholders, who are rolling 100% of their equity into the combined new company.
What this deal means for Mondee and travel technology
With an impressive profile, portfolio and position, Mondee will look to be further enhanced by this new merger with ITHAX. The SPAC (special-purpose acquisition company) will make Mondee a public company, along with an eye-catching billion dollar valuation.
In a public statement, CEO and Chairman Orestes Fintiklis said “We look forward to supporting Mondee’s next phase of growth through new business development [and] capital structure enhancements…”.
Mondee has found much of its success through subscription services, provided by its companies TripPlanet and UnPub. This merger may be an influential moment for subscription services in travel technology, with more and more businesses pivoting to the subscription economy. In May 2021, travel company eDreams ODIGEO reportedly had one million subscribers of its Prime service, a number which rose to two million just six months later. With travellers valuing personalisation and brand loyalty, subscription models may be the answer for companies to engage leads and scale for years to come.
Other travel brands announce ambitious mergers
In merging with ITHAX, Mondee joins a list of travel brands who have brokered SPAC deals during the last two years. This is speculated to be because investors are preparing for the rising demand and shifting travel trends moving forward. In December 2021, American Express Global Business Travel announced that it would be going public as part of a merger with Apollo Strategic Growth. The company was renamed Global Business Travel Group and listed on the New York Stock Exchange.
Elsewhere, HotelPlanner and Reservations.com announced that they were going public through a three-way merger with Astrea Acquisition Corp. The deal was valued at approximately €605 million, and went on to be listed on NASDAQ under the name HotelPlanner.
But why have SPAC mergers become so common for these companies? It’s speculated that one reason is because businesses can go public while making projections that are not permitted in alternatives such as an initial public offering. As noted by SPAC Research, there are nearly 600 SPACs being traded in the stock market with a combined value of approximately €136 billion. Now more than ever, these companies are searching for private firms to make public, with possibly many more travel companies to be merged in the months and years ahead.