

Kayak Prices $100 Million IPO at $25 a Share - jchernan
http://allthingsd.com/20120709/kayak-prices-long-delayed-100-million-ipo-at-25-a-share/

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arjunnarayan
Headline is wrong. They are _raising_ $100 million with an initial offering
that values the company at about $1 billion

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paulsutter
The headline isn't -wrong-, but it seems misguided. Journalists have a bizarre
habit of focusing on the amount to be raised and completely omitting the
projected market cap from the story. I'm on my phone and that's the last place
I want to be reviewing S-1's to find out that most crucial number. Thanks for
doing that

Maybe this is because they talk to bankers. Bankers only care about the amount
raised because that determines their fee. Anyone else that I can think of is
more interested in the market cap.

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Matt_Mickiewicz
They raised $196 million round in 2007 from Sequoia Capital, General Catalyst
Partners and Accel Partners.

That stake is now worth $254 million for General Catalyst. Sequoia Capital's
stake is $150 million. Accel's investment is now worth $120 million.

... that's $524 million on a $196 million investment, after 5 years. Hardly
spectacular.

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emmett
It's about 25% annualized returns for 5 years. Spectacular if it were risk-
free. Depending on how much risk you think they were taking on at that stage
(probably not much, given how proven out the model was) it's still very good
returns.

Late stage venture capital does not seek the kind of 1000x returns that early
stage does.

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eggbrain
Perhaps I'm misreading things, but it says Sequoia pumped in 196 million, but
its stock value of equity at launch will only be worth 150 million. Does that
mean they will be 'losing' money on the investment, until the stock goes up?

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eshrews
I read it as meaning the 196 million came from a combination of Sequoia
Capital, General Catalyst Partners and Accel Partners, so I think they are
still making money.

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eggbrain
That made much more sense, I saw it as 196mm from Sequoia (of the 223mm raised
total) with the rest coming from the other VC's.

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chucknelson
Good to see an IPO with a value I can kind of fathom and believe instead of,
you know, $X BILLION! or something.

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jonknee
That's just the value of the shares being sold, which is a small part of the
overall number of shares. The valuation is around $1 BILLION.

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sukuriant
Which, interestingly, is 1/6th the market cap of Expedia. Perhaps they've done
an actually valid valuation?

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jonknee
Expedia should have little to do with it. Kayak's growth, revenue and profits
are what matter.

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sukuriant
Yes; however, this is an existing business in the same market. If they're
reasonable competitiors and are getting about the same amount of business (or
are gradually growing in their business), then you could expect them to be
worth something similar. At least that's my thoughts on their entry into the
market.

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T_S_
Why do these articles alway hide the cap table?

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tiatia
What Kayak is really good in: If you have flexible dates. It shows you best
fares found for each day.

Otherwise I don't see why Sites like <http://www.vayama.com/> or not the same.
Besides the brand, what is their unique selling point? ebay, AirBnB has high
entry levels. But a site to compare flights?

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colinsidoti
I'm interested in everyone's thoughts about Kayak.

My feeling is that slowly but surely, the travel sellers who buying leads from
Kayak will start paying less. So while I see it as a successful business, I'm
not really sure where they're planning to go from here.

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rdl
As a user (a pretty hardcore travel optimizer, buying either absolute cheapest
complex fare, or "value" premium fares), Kayak is one of the few travel sites
I actually like.

Someone from there (CEO? CTO) has posted on hn and/or quora and seemed really
smart, too. Obviously they're in quiet period now so won't be commenting.

They seem pretty flight-optimized, at least for me, which is a much lower
source of revenue than hotels. If they can grow their standalone hotel res
business, or add hotels to flight purchases, they'll be worth a lot more than
even being totally successful on flights. (I book all my hotels direct with
starwood or with the property on negotiated rates, though, or use airbnb or a
few specialty negotiated-rate networks like Tablet).

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yuletide666
"four million million shares"? daaamn!

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samstave
While I have traveled a lot for work the past few years, I have never used a
single travel service like kayak, hipmunk, priceline, etc...

I go to one place for my tickets typically - the airline. My airline of choice
is Virgin which has fantastic prices anyway.

When I had a client in Nome alaska, and I was there one week per month, I used
virgin to go to SEA then alaska airlines from SEA on.

I know I am in a weird bracket, but i just never felt comfortable with any of
the third party ticket services.

It reminds me of whenever i go to a farmers market. I never remember the
prices at whole foods/safeway and I feel like I am not getting a deal, but am
being fooled by the illusion of a farmers market.

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chrisennis
Hipmunk > Kayak

