Why we valued our investment in SaaS booking platform Rezdy up by 29%
Rezdy is fast emerging as a dominant player in the Tours and Activities booking software market and has a clear strategy to create a world-leading global marketplace.
In February 2019 we wrote up the value of our portfolio company Rezdy by 29% to $5.9m as a result of strong company performance and revenue growth over the past 12 months. The oddly unrounded 29% is a result of applying a conservative revenue multiple to the latest Annual Recurring Revenue of the business. The resulting rate of increase in valuation is a long way below the rate of growth of the business.
Rezdy is a very interesting business, founded in Australia by a Frenchman who, after working in a dive shop in New Caledonia, recognised how badly served tours and activity providers were for booking software and connectivity to online travel agents and other sources of bookings. So he set out to build both the best online booking software for tours and activities in the world and a suite of connectivity tools that amount to a multi-sided marketplace for tours and activities providers, online travel agents, large booking software providers and other intermediaries such as visitor information centres and concierges at hotels.
It was a huge challenge and Simon made great progress with the help of some excellent angel investors, including collectively the founders of Hotels Combined, Menulog, SiteMinder and HotelClub, and with our help from 2015.
The tours and activities booking software and connectivity space is very complicated. Much more complicated than the equivalent in the hotel space. For a start, tours and activities come in every shade, spot and stripe. A walking tour is nothing like whale watching, whale watching is nothing like a bridge climb, a bridge climb is nothing like paintballing, paintballing is nothing like a visit to the Blue Mountains. The booking bit is the easy bit. The harder part is the allocation and management of the assets required to deliver the activity and the scheduling of both people and assets such as the boat, the scuba gear, the bus and the paintball guns.
Rezdy is a real walk and chew gum type of business. We are very focused on rapidly growing the number of tours and activity providers on our booking software platform and on becoming the king of connectivity for all the players mentioned above.
Simon helped appoint Chris Atkin as the Rezdy CEO last year and Chris is now leading a well-established team with offices in Sydney, Las Vegas and Raleigh. The business has customers in 92 countries around the world with the USA leading the way in new customer growth.
Tours and Activities is a multi-billion dollar market that has lagged behind the technology adoption of the hotel industry. In the past 12 months we have seen a rapid development in this space and with the majority of tours still booked via offline channels. Rezdy is certainly a BTI portfolio company to watch.
A version of this article first appeared in the BTI Investor Update for February 2019.
