In the idiosyncratic world of European startups, being bootstrapped can be both a badge of honour and a mark against your name, especially when you have a heavy-weight Silicon Valley competitor backed to the tune of $80.35 million.
Enter Hot Hotels, the Madrid-based last-minute hotel booking app and European competitor to HotelTonight, which is announcing its raised $1 million from Axon Partners Group — its first external investment since being founded in January 2012.
Officially, the new funds are pegged for expansion into Latin America, for which Axon brings expertise, and to further consolidate what it claims is a leadership position in Europe. However, I’m also hearing that Hot Hotels has a platform play in development, something that would see the company expand beyond just being a consumer app, to also helping other travel apps get in on the last-minute hotel booking action. The move would be another way to differentiate itself from HotelTonight, along with a plethora of other competitors such as Groupon-owned Blink.
Like HotelTonight, Hot Hotels’ mobile apps offer a selection of last minute deals each day to help fill partner hotels’ inventory, while also passing on savings to customers. These span 43 countries and 257 cities in Europe, Latin America, Asia, Africa, and Israel. Whereas the HotelTonight model is based on direct relationships with hotels, Hot Hotels operates a hybrid model that also sees it contract hotels via third parties — a model it believes scales better since it ties into existing technology platforms used by the hotel and travel industry, essentially redesigning the experience for mobile, and also enabling it to offer a larger inventory of deals compared to others in the last-minute mobile-only hotel booking space.
In a statement, Conor O´Connor, CEO of Hot Hotels, comments: “With this investment by Axon, we now have the firepower to establish clear water between ourselves and our competitors in Europe. With the expertise of Axon’s investment team, as well as its global network of offices, Axon provides a base to accelerate our roll-out in fast growing Latin America.”