Updated: Kayak Acquires SideStep For Reported $200 Million; Travel Search Engines Will Merge


Travel search engines Kayak and SideStep are merging in a reported $200 million deal, creating what they believe will be the fifth largest travel search site. Both are “meta” sites, meaning they cull data from other sources, such as Orbitz. Despite their similar purview, the sites claim to have less than 10 percent audience overlap. Sidestep will operate as a subsidiary of Kayak, and the companies say that users won’t see a difference, according to WSJ. Actual integration will be in the areas of technology and content.

— The deal has two components, according to TechCrunch: First, Kayak is raising $196 million from existing investors Sequoia Capital, General Catalyst Partners and Accel Partners, SideStep investors Norwest Venture Partners and Trident Capital, and new investors Oak Investment Partners and Lehman Brothers Venture Partners. It’s also raising debt from Silicon Valley Bank and Gold Hill Capital. The funding will then go towards the $200 million purchase — $20 million of this amount is SideStep’s own cash. Update: The official announcement is now out, confirming the $196 million raise, but making no mention of the price paid for SideStep. Release. Lots more after the jump…

— Woody Marshall of Trident Capital told VentureBeat that the merged companies intend to do an IPO next year, not so much to raise capital, but as a branding move.

— Prior to this, SideStep, which has raised over $30 million from VCs, did some buys of its own, including social net TripUp and user reviews site TravelPost.

SeattlePI: “Madrona Venture Group’s Matt McIlwain, an investor in Farecast and a big believer in vertical search sites, said the Kayak/SideStep deal could have “big, positive implications for Farecast.” In an e-mail, McIlwain notes that Farecast could emerge as the No. 2 player in travel search behind the newly merged Kayak/SideStep.”

Other vertical travel search sites to have recently raised funds include Kango, which is taking a semantic approach, and Kosmix, which started off doing health, but is expanding into travel. There are a host of other small or niche travel sites, and it wouldn’t be surprising to see more join hands.


Elliott Ng

Sorry, I tried to link directly to our post about this subject but it didn't work. Anyway, we posted our POV about this merger. Love to get your thoughts. Happy holidays!

Elliott Ng

Frankly I don't know how this helps Farecast, other than create some more competitive pressure by the OTAs to do something about Metasearch.

We at Kango are really addressing a different problem than price comparison search. We are aggregating the collective wisdom on the Web, doing semantic analysis, to help people during the initial travel planning phase. Then when they know what they want to buy, then they move on to price comparison, then to booking. Finally, sharing is the last stage. Each of these stages can be addressed by a different competitive set. Anyway, looks like 2008 will be an interesting and good year for the entire online travel space.

Hitta Billiga

Travel search engines Kayak and Sidestep are very convenient and easy to search and easily understandable and also giving good results.

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