Mews Raises $110m to Accelerate Cloud Technology in Hospitality
Just 14 months ago, Revaia invested in Mews as part of its $185m Series C fundraising round. Mews represents so many elements that get us excited about a company: a founder with a strong vision, the potential to make a huge impact on a market with predominantly legacy, on-premise solutions, and an international team with a singular focus to revolutionize an industry.
At the time of our investment, Mews was already delivering a blistering performance thanks to its robust property management platform for hotels. Mews reported strong year-over-year revenue growth as the hospitality industry rushed to embrace digital transformation.
Today, we are immensely proud to double down on our support for Mews as part of the $110m round the company just closed. Kinnevik led the round, which also included other previous investors such as Goldman Sachs Alternatives and Notion Capital, along with new investor LGVP. This participation is a sign of the confidence and optimism that all investors share.
The new funding values the company at $1.2bn. That's a significant increase from December 2022, and it reflects the extraordinary progress the company has made. Mews' 2023 revenues increased over 60% year-over-year and now has $100m in annualized net revenue. Gross Payment Volume grew significantly to over $8bn, and Mews has more than 5,000 customers who operate 350,000 hospitality spaces.
Mews is revolutionizing the aging legacy technology of an industry through innovation thanks to the visionary leadership of Founder Richard Valtr and CEO Matt Welle. Richard, a hotelier himself, founded Mews in 2012, motivated by his frustration over the limited functionality of traditional on-premises systems used to manage hotel operations. Last November, Matt shared some key insights into Mews' success when he spoke at Revaia's 5th Anniversary party. You can dig into those details here , but to briefly summarize: deftly navigating the Covid crisis, a laser-focus on product simplicity for users, diversifying revenue streams, and a sophisticated approach to M&A to expand functionality and consolidate leadership in new markets.
But there is another, more profound element to the Mews story that goes beyond metrics, and that makes it the kind of investment that inspires and excites us:
Mews' platform is innovation that enables innovation. Mews has partnered with over 1,000 tech solutions in its marketplace to enable hoteliers to innovate and build the tech stack that perfectly suits their needs.
Unlocking creativity
In the official press release announcing the fundraising, Richard says: “We're seeing a fundamental shift in the way the world's leading hospitality brands are accelerating their digital transformation and reshaping the way they deliver hospitality.”
The dynamic he's describing is more than a wave that Mews just happens to be lucky enough to ride. Mews is playing a key role in enabling that transformation thanks to Mews' Hospitality Cloud, which provides an integrated solution for payments, operational management, guest service, and a marketplace of new digital services.
Coming from the hospitality world, Richard and Matt had first-hand experience with the painful and frustrating limitations imposed by legacy IT systems. Not only were they clunky and inefficient, but the traditional systems were rigid, giving hotel owners and managers almost no ability to evolve their core businesses. Even worse, it was hard to address the various shortcomings those systems created for serving customers, risking not just inefficiencies but also dissatisfaction among guests.
Richard and Matt wanted to build a platform that made it far easier and more efficient for hotels to manage their guests and truly deliver a hospitable experience. But they also saw the possibility of a much larger win. If they could create a platform that was agile and easy to extend, they could remove the IT straitjacket from hotel operators and unleash their creativity.
This is exactly what we're seeing now in the hospitality industry on a grand scale.
The pace of transformation within the hospitality industry is accelerating, driven by property owners who are discovering innovative ways to package and sell spaces as services. They are reimagining the fundamental ways they serve guests, including catering to new types of guests and redefining the essence of their properties. Now guests can book day use of a room; book a spa visit; turn the lounge into a co-working space; rent the swimming pool for a group event; and so on. More and more, they are becoming hosts for new experiential journeys their customers want.
Previously, launching such new services was a nightmare from a technological point of view, and therefore discouraging. Rather than holding them back, Mews is powering these experiments. The sky's the limit for the creativity of a hotel and the experience it can provide guests.
The Future
Building a tool that helps a customer save a bit of time or money is certainly appealing as a business proposition, but also can be somewhat complex as the target weighs the pros and cons and tries to calculate when they will see a return. Mews' platform absolutely delivers in this regard.
But a tool that makes it possible to do anything, particularly things that will create new types of services and revenues and make greater use of existing properties without requiring huge capital expenditure investment, makes it easy for potential clients to see the big upside while creating excitement and loyalty.
The ability to spark such enthusiasm among hotel owners is a big part of the reason Mews has over-performed since Revaia first invested.Along the way, we have done our part to be a true partner to the leadership team by leveraging our position as a European investor with a global outlook.
We're particularly proud that the French and German markets have become such an important part of their business. And the Mews team continues to impress us by being the most active acquirer in our portfolio, having done eight deals, including the acquisition in January of Frontdesk Anywhere , its 8th deal overall, and third in the North American market over the past year.
Daniel Ahremark, CFO of Mews commented, “We have had a phenomenal year, with significant revenue growth underpinned by our product development, acquisition strategy, customer diversification and market expansion. As the demand for modern technology rockets, we are grateful to have investors who share our passion for transformational cloud-native technology. We have a huge opportunity to transform the hospitality industry and our latest funding enables us to scale at a rapid pace with expansion into new territories and customer segments."
Over the past year, they have overperformed their projections, and now are revising up their forecasts for 2024 and 2025.
Yet there remains a lot to be done. Adding functionality, funding acquisitions, and conquering new geographies require the company to invest. Back in November at Revaia's anniversary party, Matt noted that Mews' biggest challenge felt almost paradoxical at a moment when macroeconomic conditions have forced so many other scaleups to curtail their ambitions and focus instead on slowing cash burn and unit economics.
In contrast, Mews leaders are asking: How can we grow fast enough?
The new funding is part of the answer to that As Mews consolidates its markets, attracts new customers, and expands its relationship with existing customers, there is more than enough potential to justify this latest infusion of cash. As is the case for the hotels they serve, we also believe the sky is the limit for Mews' future.
As thrilling as the previous stage of the journey has been, we are even more excited to play our role in helping Mews fulfill its wildly ambitious potential.