Hotel Tech Startup Mews Manages Hefty $185 Million Raise

25.08.2023 - 14:26 / skift.com / Justin Dawes / Richard Valtr

The hotel tech startup Mews has raised $185 million, a number high above typical venture capital fundraises in that industry. 

The highest hotel tech fundraise in recent years was by Cloudbeds, which raised $150 million in 2021.

The fundraise — led by Kinnevik and Goldman Sachs Asset Management — sets the valuation for Mews at $860 million, said founder Richard Valtr, a number that may have been higher in what experts agree was an inflated market over the past couple of years. Now, raising money is harder because of uncertain economic conditions. 

“It’s pretty brutal,” Valtr said. Regardless, the valuation is 4.5 times higher than what it was when the company raised $33 million in 2019.. 

“I think that most people were kind of expecting us to be way over a unicorn at this stage. But I think it reflects basically where valuations are in the market,” Valtr said. “I think that what you see now is, basically, the companies that raised in ‘20 or ‘21, they’ll have a hard time growing into those valuations.”

The company did have final valuation offers of around $1.3 billion or so, but he went with the lower number. 

“It would have meant mortgaging the company to things that are really, really difficult to actually predict,” Valtr said. 

Many startups tend not to share the valuation of their companies, but Valtr did so when asked in the name of transparency, he said, as he looks toward a potential IPO in the future. The company is not sharing specific revenue numbers at the moment, but that may change after the company hits certain milestones, he said. 

As part of the round, about 10 percent of existing employees are receiving some money. 

“It’s something that you definitely see in other companies, but usually, it’s the founders that take that for themselves. And we were really, really wanting to share that to as many people within the company as possible.” 

Kinnevik invests to form long-term relations with a smaller portfolio of high-growth companies in a number of industries, said Akhil Chainwala, investment director of Kinnevik.

With Kinnevik’s hands in several industries, the firm can see how tech adoption in the hotel industry compares others, said Chainwala, who is joining the Mews board. 

“I think if there’s one takeaway from this, it’s a bet on product,” Chainwala said. “When you take a closer look at that and see cloud adoption rates — and frankly, even technology adoption, let alone cloud — they are lagging quite far behind what we see in many other sectors.” 

On top of a general effort to modernize that was accelerated by the pandemic, wage inflation and labor shortages are compelling owners to automate more of their operations. That’s what Max Starkov, a hotel tech consultant and industry veteran,