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Trivago is planning to raise $428 million through its IPO

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Trivago, a Germany-based online hotel booking platform, is all set to raise about $428 million in an initial public offering (IPO) that is slated to take place around December 15. It will be listed on the Nasdaq under the ticker – “TRVG”.

For the offering, the company is expected to price its share between $13 to $15 per share that would value the company at around $5 billion. The company will also officially change its name to Trivago from Travel B.V. to match its popular web property.

However, Expedia Inc. will still own a controlling stake in the company. With $5 billion valuation, it will be behind its major competitor — TripAdvisor, which is currently at $6.9 billion market cap.

Trivago, whose mission is to “be the traveler’s first and independent source of information for finding the ideal hotel at the lowest rate”, has currently over 1.3 million hotels listed on its platform from over 190 countries.

The platform enables users to compare and book hotels. The company also has partnerships with three other global online travel agencies and 115 regional online travel agencies, plus 150 hotel chains and 7,000 independent hotels.

The company generates revenue by charging hotels and travel agents on a “cost-per-click” basis. As per the company, in the previous year only, the company has generated over 487 million “qualified referrals”.

Trivago is seeing rapid revenue growth. In just nine months, i.e. till September 2016, the company reported $425.6 million revenue, up from $324.6 million in 12 months of previous year. The net loss of the company in the year 2015 stood at $42.8 million.

In its IPO paperwork, Trivago quantifies the online hotel opportunity at $375 billion. It further adds that around 56 percent of the world’s hotels are independents, and online adoption among consumers stands at only 33 percent.

If the company’s initial public offering is successful, then Trivago is likely to emerge as the fourth largest publicly traded online travel company behind the Priceline Group, Ctrip, Expedia and TripAdvisor.

Founded in 2005, the platform claims that it empowers more than 120 million travelers every month in their search for the ideal hotel. So far, the company has raised over $53 million in funding. In 2012, Expedia acquired majority stake in the company for $632 million.

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