Mondee plans SPAC merger to increase vacation rental offering

US: Travel technology marketplace Mondee, which provides services to leisure travel agencies, tour operators and corporate and subscription businesses, is set to go public next year via a merger with special purpose acquisition company ITHAX Acquisition Corp. 

The transaction is expected to occur in the first half of 2022 and Mondee will list on the Nasdaq under the ticker symbol “MOND”. The combined company is set to be worth around $1 billion.

As part of the deal, the company is to raise $50 million in public equity financing [PIPE], including funds affiliated with Morgan Stanley Investment Management and other investors, which will be used alongside the $241.5 million raised by ITHAX SPAC in its initial public offering [IPO] last January to expand Mondee’s offering through mergers and acquisitions [M&A].

Founded in 2011, Mondee is seeking to modernise and disrupt the travel space by leveraging technology platforms, feature-rich product offerings and customised content to serve the surging gig economy and cater to the next generation of travel demand. Since its establishment, the firm has 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 a bid to “transform the entire travel industry”, Mondee plans 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: “Mondee developed industry-changing technology that transformed the existing antiquated travel infrastructure with a modern agile platform. Our platform and industry relationships provide the right marketplace with the right tools and the right content offerings to enable and accelerate our customers’ success.

“Today’s announcement marks the beginning of the next chapter of our growth as the travel market continues to normalise,” he added.

Orestes Fintiklis, CEO and chairman of ITHAX and founder of Ithaca Capital Partners, said: “ITHAX launched with a mission to partner with an established travel and hospitality leader with a highly-disruptive yet proven business model, exponential revenue growth and historical EBITDA, and Mondee is precisely that partner. Mondee has built a disruptive $3 billion travel marketplace on technology and content platforms that are generating significant revenue growth within a fragmented, massive market.

“Prasad and his team have demonstrated their ability to execute on successful and synergistic acquisitions, while Mondee’s multi-pronged growth strategy allows it to continue to capitalise on market trends. We are thrilled by the opportunity to work with Prasad and his seasoned team to help bring the company public at a compelling valuation, which we believe will allow investors to capture a great deal of upside from Mondee’s exponential growth,” he added.

This year saw a surge in companies going public via mergers with special purpose acquisition or “blank-cheque” companies. Alternative accommodation marketplace HomeToGo and vacation rental management company Vacasa were two of the most high-profile firms in the short-term rental space to go public via SPAC mergers in 2021, while the likes of Sonder, Inspirato and OYO are due to follow suit in 2022.