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Is Hooper inching closer to an IPO? A Bloomberg story Tuesday teased a Hopper IPO with the headline, Travel App Hopper Eyes Long-Term IPO Plan, $10 Billion Valuation.
Hopper, founded in 2007, has long had plans for an IPO. It has raised $730 million in funding during its 18 year history.
At Skift Global Forum in 2023, Hopper co-founder and CEO Fred Lalonde said the travel app would eventually go public, but the priority at the time was to get profitable and scale the business.
That was a rough period for Hopper. Two months earlier, Expedia Group had loudly severed ties with it, cutting off Hopper’s largest supply of hotel inventory. A few weeks after the Skift event, Hopper preemptively ended its hotel relationship with Booking.com before Booking.com could announce a breakup.
Hopper’s main revenue streams are fintech products (freezing fares and cancelling bookings for any reason), hotels and flights. In October 2023, Hopper said about half of its revenue came from fintech. The company has a number of business-to-business partnerships, such as powering much of Capital One Travel, which is a strategic investor. Other investors include Goldman Sachs, Brookfield Asset Management, Citigroup, and the Caisse de Depot et Placement du Quebec, according to Bloomberg.
Hopper Conditions for an IPO
The Bloomberg story said the valuation for a Hopper IPO could be $5 billion to $10 billion, according to Lalonde’s estimate. Hopper didn’t immediately reply to a Skift request for comment.
Hopper had a $5 billion private valuation as early as 2022, but wasn’t in a hurry to see its shares trading publicly at that point.
There were a couple of new elements to the Bloomberg story. Lalonde said:
He’d like to see Hopper, which is based in Montreal, trade on both the Nasdaq and Toronto exchanges.
To make an IPO viable, Hopper would have to generate trailing sales of at least $1 billion — or have a path to reach that mark within 18 months — and be profitable. Lalonde didn’t specify how close Hopper is to that milestone.
Private Equity Option
Lalonde also told Bloomberg that an IPO isn’t the only exit strategy. A long-term, private equity investor would be another option.
One recent bright spot for Hopper is that Expedia Group, helmed by a new CEO since mid-2024, resumed supplying hotel inventory to Hopper.
In November, Hopper laid off around 10% of its workforce, its second restructuring in a little more than a year. The team that got hit the hardest was the one responsible for establishing direct contacts with hotels. With Expedia again providing hotel inventory to Hopper, that hotel-direct sales team became less strategic.
Hopper’s hotel supply would be a keen area of investor interest in any IPO. What if Expedia decided to turn off the hotel supply spigot again?
On the other hand, Hopper’s youthful audience and fintech products are clear differentiators.
Some competitors have partnered with Hopper to offer those same fintech products, but none has developed their own in a big way.
