Engine Secures $140M Funding for Travel Expansion

Engine Secures $140 Million Series C Funding, Valuation Reaches $2.1 Billion

Engine, formerly known as Hotel Engine, has successfully secured a $140 million Series C funding round led by Permira, a private equity firm. This substantial investment has placed the Denver-based startup at a valuation of $2.1 billion, representing a remarkable 62% increase from its previous valuation of $1.3 billion following a $65 million Series B in 2021. The surge in valuation signifies the resurgence of business travel, which was significantly impacted by the COVID-19 pandemic. Engine's platform facilitates connections for business travelers to over 750,000 hotels, 300 airlines, and 40 rental car companies, providing exclusive deals and reservation management services. Notably, the company, which has been profitable and is experiencing a 70% annual revenue growth, intends to utilize the newly acquired funds to expand its product offerings, including the incorporation of flight and rental car bookings. Moreover, Engine has also unveiled a rebranding initiative to encompass its broader mission of transforming the entire travel experience. CEO Elia Wallen has particularly emphasized the company's aspiration to evolve into the "engine of business travel." This latest funding round holds the distinction of being the most significant investment in a travel business startup this year, surpassing the $106 million Series D secured by Spain-based TravelPerk in January. Since its establishment in 2015, Engine has successfully raised a total of $221 million in funding.

Key Takeaways

• Engine raises $140 million Series C, propelling the company's valuation to $2.1 billion.
• The new valuation represents a notable 62% increase from the prior $1.3 billion following the Series B round.
• Engine undergoes rebranding to emphasize its commitment to revolutionizing the entire travel experience.
• The company intends to expand its platform to encompass flight and rental car bookings.
• Engine boasts a 70% annual revenue growth, positioning it as the standout travel startup investment of the year.

Analysis

The notable surge in Engine's valuation mirrors the resurgence in business travel following the impact of COVID-19, aligning seamlessly with the heightened demand for its comprehensive services. Permira's pivotal investment is expected to expedite Engine's expansion into the realm of flight and rental car bookings, thereby fortifying its competitive edge. In the short term, this development bolsters Engine's market position and revenue growth. In the long term, it positions Engine as a comprehensive travel solution, potentially disrupting conventional travel agencies. Furthermore, competitors such as TravelPerk may encounter heightened competition, while investors in the travel tech industry may experience a renewed interest in this sector.

Did You Know?

• Series C Funding Round: This stage in the venture capital funding process, following Series A and Series B rounds, typically occurs after a company demonstrates substantial growth and market traction. Series C funds are typically utilized for scaling operations, venturing into new markets, and executing strategic acquisitions. In this instance, Engine secured $140 million in Series C funding, signifying robust investor confidence in the company's future growth potential.

• Permira: This global private equity firm focuses on long-term investments across various sectors, including technology, consumer goods, and healthcare. Permira's participation in Engine's Series C funding round underscores its belief in Engine's potential to disrupt the business travel industry. The firm's investment strategy often involves supporting companies with high growth potential and assisting them in scaling through operational enhancements and strategic initiatives.

• TravelPerk: Based in Barcelona, TravelPerk offers a comprehensive suite of tools for managing business travel, encompassing booking, expense management, and adherence to travel policies. TravelPerk's $106 million Series D funding round in January 2024 marked a significant milestone in the travel technology sector. The surpassing of TravelPerk's Series D by Engine's $140 million Series C underscores the competitive landscape in business travel technology and the growing investor interest in this domain.