US: Luxury travel subscription brand Inspirato is to receive $25 million in funding via a convertible note investment from Capital One Ventures after a definitive agreement was struck.
According to a press release, the capital is expected to provide “broad operating flexibility” to Inspirato as it continues to enhance the luxury travel experience it delivers for its members.
Nathan Krishnamurthy, partner at Capital One Ventures, said: “Through strategic investing, we look to harness the potential of innovative companies that could integrate well with Capital One’s business and infrastructure. With its access to extraordinary properties around the world, a well-developed technology footprint, and white glove service capabilities, Inspirato offers a unique membership for luxury travellers.”
Inspirato manages a portfolio of hand-selected vacation options, included branded, controlled luxury vacation homes available exclusively to subscribers and guests, accommodations at five-star hotel and resort partners, and custom travel experiences. Monthly subscriptions to Inspirato’s properties currently hover around the $2,550 mark.
Jenn Scheurich, vice president of Capital One Travel, said: “Inspirato is an innovator in the travel space, providing unique offerings and extraordinary service to its members, and we are thrilled to partner with them.”
Inspirato co-founder and CEO, Brent Handler, said: “Inspirato is focused on leveraging innovation to drive customer satisfaction and growth. This investment enables us to set a global standard for luxury travel and continue enhancing our exceptional experiences to meet evolving consumer needs.”
The issuance of the convertible note remains subject to certain closing conditions, including the entry into a commercial agreement between Inspirato and Capital One prior to the closing, and the receipt of Inspirato shareholder approvals.
The news comes just weeks after Inspirato announced its second round of job cuts this year, having laid off around 50 team members [around six per cent of its team] last month, following a 12 per cent team reduction in January. Departments affected by the cuts included tech, business intelligence and human resources divisions, as Jeff Hartman, executive vice president of marketing at Inspirato, called the cuts a “right-sizing” of the business.
In December, Inspirato reported a net loss of $7.3 million at its Q3 quarterly earnings call, at which point the company attributed the losses to rising operating expenses and slower than anticipated signups to Inspirato’s subscription-based service Pass, which is designed to offer subscribers more flexibility, added value and over one million trip options in more than 100 destinations worldwide, and debuted in 2019.
That was followed up by a net loss of $5.9 million in Q1 of this year, although it was a significant improvement on the $24 million loss recorded 12 months prior.
In February 2022, the private travel club closed its business combination with special purpose acquisition company [SPAC] Thayer Ventures Acquisition Corporation and began trading on the Nasdaq Stock Market, secured more than $100 million in net proceeds and reaching an initial valuation of approximately $1.1 billion in the process.
Since then, Inspirato’s share price on the Nasdaq has plummeted from a high of $3.60 at the start of March 2022 to a current figure of $0.073.