Mondee closes SPAC merger with ITHAX Acquisition Corp

US: Travel tech company and marketplace, Mondee, has announced its long-awaited business combination with special purpose acquisition company [SPAC] ITHAX Acquisition Corp.

As a result of the merger, ITHAX has been renamed Mondee Holdings, Inc., and Mondee began trading on the Nasdaq on Tuesday under the ticker symbols, MOND and MONDW, respectively. The newly publicly trading company debuted with a market capitalisation of approximately $740 million and will collect around $77 million in funding from the transaction, albeit far below the $291.5 million figured that was initially mooted last year.

Mondee began trading at around $11 a share, although it dropped to closer to $10 within an hour of the Nasdaq bell ringing ceremony.

Founded in 2011, Mondee provides services to leisure travel agencies, tour operators and corporate and subscription businesses. and is seeking to modernise and disrupt the travel space by leveraging technology platforms, feature-rich product offerings and customised content to serve the gig economy and cater to the next generation of travel demand.

The firm has since expanded into the hotel and car rental segments, as well as cruise and tour offerings, and has completed the acquisition of a number of platforms in the travel tech market, such as Rocketrip, TripPro, Cosmopolitan Travel Services and TripPlanet.

In December, it was rumoured that Mondee was planning to use the funds to enhance its hospitality options in the vacation rental space, digitise the cruise and tours segments, and strengthen its distribution program with subscription-based models for its user demographics.

Mondee founder and CEO, Prasad Gundumogula, said: “We are well-positioned to consolidate our EBITDA profitability and accelerate our growth strategy as a result of this business combination. The capital raised through this transaction along with our new access to the public markets will allow Mondee to capitalise on the massive organic and inorganic growth opportunities in the travel industry and continue to advance our travel technology platforms and next-generation solutions.”

Orestes Fintiklis, CEO and chairman of ITHAX, and founder of Ithaca Capital, said: “We are truly delighted to complete our business combination with Mondee, a market leading company that we expect will continue to disrupt the travel market. Mondee has a proven track record of profitable growth and success, giving us confidence that the company will continue to deliver long-term value to shareholders and we look forward to continuing to support them in the years ahead.”

Mondee’s public market debut was in some doubt even just before this week, after reporting a Q1 net loss of $7 million on net revenue of $38 million, in comparison with a $38.9 million loss and $93 million revenue generation last year.

A number of high-profile short-term lodging companies have struggled since going public in the last eight months via SPAC mergers, despite high trading debuts.

Portland-based vacation rental management platform Vacasa went public in December, raising gross cash proceeds of $340 million and debuting with a valuation of $4.4 billion, shortly after announcing “record-setting” financial results for Q3. However, while its stock began trading at the beginning of 2022 at $8.32, its shares have since decreased by more than 67 per cent to $2.69.

Similarly, San Francisco-based next-generation lodging firm Sonder closed its SPAC merger with Gores Metropoulos II in mid-January, with $165 million allocated in a principal amount of Delayed Draw Notes to fund operations and support new and existing growth initiatives. Despite hitting $10.80 a share in February shortly after its market debut, Sonder’s stock now trades around the $1 mark.

On top of that, Sonder announced a restructuring across its organisation in June, which triggered the laying off of 21 per cent of its corporate team and seven per cent of its frontline staff. Although company executives said they remained optimistic and confident about the future of travel and sustained long-term growth, Sonder said that it was prioritising increasing its cash flow and opening units on which it had already exchanged contracts.

The likes of alternative accommodation marketplace HomeToGo and luxury travel subscription brand Inspirato have also made their public market debuts via mergers with special purpose acquisition companies in the last 12 months.