Last-Minute Booking App HotelTonight Raises $45M With An Eye On Continued Global Expansion
HotelTonight, the startup that allows users to find and reserve same-day hotel rooms from their smartphones, is announcing that it has raised $45 million in Series D funding.
The round was led by hedge fund Coatue Management, with participation from new investor GGV Capital and previous backers Battery Ventures, Accel Partners, US Venture Partners, and First Round Capital. HotelTonight has now raised a total of $80.35 million.
The company says that since it announced its Series C in June of last year, it has doubled downloads to more than 6.5 million, added more cities (it now features hotels in nearly 120 locations across 12 countries), and doubled its headcount to more than 100 employees as well.
The growth, as well as the big new round, suggests that HotelTonight has proven there’s there’s interest in the concept beyond affluent techies in San Francisco and New York. Co-founder and CEO Sam Shank said that’s also evident in some of the markets where HotelTonight is growing the most quickly, such as smaller cities in the US Southeast. He also said that while the app initially targeted the early adopter, 25- to 35-year-old crowd, its user demographics are now “very representative of online travelers generally.”
(And while this may say as much about Shank’s family dynamics as it does about HotelTonight’s business, he was also proud that his mom recently booked her first HotelTonight reservation.)
Shank added that it’s risky to put all on-demand apps in one group, but did defend the category (which can sometimes be criticized for just catering to the aforementioned affluent techies).
“I don’t think because one specific type of on-demand service failed that on-demand itself is a failure,” he said. “What it does is, it empowers people to live spontaneously and live the way that we were originally wired.”
Looking ahead, Shank said the company is focused on two main areas. First, there’s geographic expansion. The ultimate goal, he said, is “geographic ubiquity,” so that the HotelTonight app can find you a hotel room no matter where you are, whether that’s in a farflung international location or a small town in the US. (As HotelTonight expands globally, it also faces more competitors.) Shank noted that bringing on GGV as an investor should be helpful on this front, given the firm’s presence in Asia.
Second, he said that one of the reasons for HotelTonight’s success has been the high-quality, curated experience in the app, and the company will be “investing a lot in product, a lot in the platform.”