Our Investment in Mews
The Future of Property Management & Hospitality
Yesterday we announced our participation in Mews’ $185m Series C fundraising round (read Mews’ blog post here). Mews is a hospitality-driven Property Management Software tool that was founded in 2012. The company generates revenues through two main channels: SaaS and Payments. The team is composed of nearly 500 employees based in 18 different countries with hubs in Amsterdam, Prague, Paris, New York & London.
Mews has raised c. €40m to date with Tier-1 international investors, including Battery Ventures and Notion Capital. Battery Ventures is known for backing companies such as Splunk, Confluent, Jfrog, Coupa, and Trip and HotelTonight in the travel space. Notion Capital, on the other hand, has backed early-stage companies such as Bryter, Currency Cloud, Go Cardless, and Triptease in the hotel SaaS space.
We’ve been trying to engage with the Mews team since around 2020. They came onto our radar early but it’s been a long process to find the right time to partner with them around their growth efforts. This year we identified that opportunity and were fortunate to get involved thanks to some investors we’ve collaborated with before.
Mews could really be considered the poster child for vertical software at scale. They’ve built and executed on a tried and true vertical software playbook for the hospitality space– starting out with a core product, pure-play SaaS, and layering on additional features, integrations, and perhaps most importantly, a payments module which is both functionally important and serves as a key revenue channel. In that respect, you could compare them to a Shopify, building the core shopping platform but slowly increasing revenue share around payment processing. We have another portfolio company, Planity, which is a SaaS platform for appointment bookings in the beauty industry, that is pursuing a similar path. At this point, the Revaia team really understands the power of vertical software and we saw that reflected in Mews’ business plan when we reviewed it in detail.
The company’s Reservation Management, Housekeeping, and Revenue Management modules enable the complex management and operations of hospitality businesses. Additionally, Mews has the largest suite of apps and integrations in the hospitality industry with over 600 offerings.
Property management systems (PMS) are critical for hotels to efficiently manage reservations, guest check-ins, billing, and other day-to-day operations. In fact, PMS have the highest wallet share of any hotel’s software budget at 26%, according to a recent study by the Hotel Technology Next Generation (HTNG) industry group. This makes companies like Mews, which offers a cloud-based PMS solution, an attractive proposition for hotels looking to streamline their operations and improve their efficiency. With a PMS in place, hotels can reduce their reliance on manual processes and errors, while providing a better experience for guests. Overall, the use of PMS in the hotel industry has been steadily increasing over the past few years, and it is expected to continue to grow as more hotels adopt these technologies.
Historically, the hospitality industry has been segmented between incumbent behemoths like Oracle’s Opera, a horizontal property management suite, and hyper-local point solutions. Mews has flipped the approach and built a rich, core product and opened up to enable a marketplace of 3rd party plug-ins. A stark contrast to the closed ecosystem that is typical of legacy players like Oracle. Speaking to the second segment — local, niche players — Mews tacked on debt financing to the equity fundraise to accommodate a strong M&A strategy. To date, they’ve acquired direct competitors and complementary tools like HotelPerfect, Bizzon, & Winner Hotel Software. Mews is a clear leader in the space and has plenty of room to grow, which is exciting in and of itself!
On a separate note, it should be mentioned that this deal is happening in a period where the growth equity market is essentially frozen, which is a testament to Mews’ management team and the fundamentals of the business — they actually outperformed expectations despite the current conditions. Something particularly unique is how truly international the team is and the fact we were able to meet them in-person on three different occasions. It was a rare pleasure to get to know the team and really dig deep into their plans for the future.
As it pertains to the Revaia ethos and investment thesis, there are a few factors here where we found strong alignment. First is business-oriented: France is a critical market for hospitality and our local presence and capacity for introductions will be meaningful. The second is the fact that we can support them in thinking about their ESG strategy, an area they’ve excelled in already regarding diversity and inclusion & environmental policy. All around, we feel they are a great fit for our portfolio and we are eager to support their team as they begin their growth journey!
*Special thanks to Morgan Kessous for providing first-hand details from the deal cycle!
