Expedia Invests in Room 77’s Big $30 Million Round

room77_logo_rgbA number of high-profile names in the travel industry are betting on Room 77, a three-year-old start-up in the hotel-booking business.

Today, the company is announcing its third funding round, totaling $30.3 million, with Expedia as the notable headline investor.

Others participating include Sutter Hill Ventures, General Catalyst Partners, Concur Technologies and Felicis Ventures, as well as a number of travel industry vets, including Expedia’s founder Rich Barton, former Expedia CEO Erik Blachford and Zillow CEO Spencer Rascoff.

The Mountain View, Calif., company first launched in 2010 as a way for travelers to see the actual view from a hotel room, but in late 2011, it rolled out hotel searching capabilities, which work like searches conducted on Kayak.com. Consumers visiting Room 77 can search across several travel sites, including Expedia, Booking.com and Orbitz, to compare prices.

The investment comes at a time when the travel industry is clearly heating up.

Over the past couple of months, Expedia acquired a 62 percent stake in a German travel site, Trivago, for $632 million; Liberty Interactive bought most of Barry Diller’s stake in TripAdvisor for $300 million; and Priceline acquired Kayak for $1.8 billion, shortly after the hotel-and-flight search site went public.

Room 77 allows U.S. consumers to book hotels all over the world, but the company plans to use the funding to expand globally, including to other English-speaking countries. To date it has raised $43.8 million.

In a release, Expedia’s CEO Dara Khosrowshahi said, “We believe metasearch is an increasingly important model and complementary to our travel transaction businesses. The level of innovation and depth of content at Room 77 excites us about its future role in this important customer acquisition channel.”

Since Room 77 launched its hotel-search platform a year ago, it said its bookings and revenue have accelerated dramatically. Although it wouldn’t provide specific numbers, the company said that over the past nine months alone it has booked “hundreds of thousands of room nights,” which has resulted in significant month-over-month growth.

The company said it would also use the funding to expand its team of 25 employees, continue investing in product development and step up its marketing efforts.


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