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Another major investment in the travel sector is declining, he points out ongoing rebound After the Covid-19 pandemic. ProcessIt is a technology conglomerate controlled by Naspers It pays $1.7 billion to get Get outOne of the largest online travel agencies in Latin America to expand its operations in the region.
Despegar’s board of directors has already approved the deal, which will go to a shareholder vote, Prosus said in a statement today. He expects the deal to close in the second quarter of 2025.
With LatAm GDP expected to grow by 2%-3% next year, Prosus wants to use Despegar to tap into larger economies of scale in the region. Food delivery platform iFood, Latin America’s answer to Ticketmaster, already owns iFood and Sympla, and once the deal closes, it will have 100 million customers across all three properties combined.
“This acquisition is a clear demonstration of our strategy to create value by creating a high-quality ecosystem of complementary businesses,” said Fabricio Bloisi, CEO of Prosus Group. “Despegar is a highly profitable company with an attractive market position and an experienced management team, making it a natural addition to our presence in Latin America. We will accelerate Despegar’s growth by leveraging the extensive customer touchpoints in our portfolio.”
This is a fitting result for Despegar, which has struggled to grow over the last decade of economic, social and public health in the region.
The company, based out of Argentina, is publicly traded on the NYSE and had a market capitalization of $1.24 billion at the market close last Friday. The deal, which sees Prosus pay $19.50 per share, is a 33% premium to that price, but still less than Despegar’s market cap on its first day of open trading in 2017.
On Despegar’s side, this could give the company a near-term investment boost.
“For our clients, this means access to an expanded portfolio of services, a better experience, more loyalty benefits and more complete solutions tailored to their needs,” Despegar CEO Damián Scokin said in a statement.
The deal is one of the latest investments in travel and tourism technology. Most recently, last week Hostaway — which makes software for the private short-term rental market — has raised $365 million from General Atlantic. General Atlantic, as it happens, was once an investor in Despegar when it was still a private company. Other backers over the years have included Accel, Tiger Global, Sequoia, hotel giant Accor, TPG and even Yahoo (TechCrunch’s parent company).
Despegar is one of the older and larger online travel brands on the market, having been around in one form or another since 1999, during the first dot-com boom (it also controls another major Latin American travel brand, Decolar in Brazil).
These days, it is active in about 19 different markets in the region, serving both direct-to-consumer and white-label offerings used by banks, airlines and other retailers that sell travel services to their customers.
And yes, he tried to keep up with the times and built a conversational chatbot called Sofia. Despegar, which competes with Hotel Urbano, says it sees about 9.5 million transactions annually, with $5.3 billion in total bookings, $706 million in revenue and $116 million in EBITDA (based on all 2023 results).
