About three minutes into our conversation, I confessed to Mews cofounder Richard Valtr that I might hate traveling. For a guy who started a software company geared towards hotels, he takes my admission in stride—he even gets it.
“That actually speaks to just how lonely it is to arrive in a new place,” said Valtr. “Think about ‘check-in,’ even the naming of it is just wrong. A check-in basically asks ‘How are you?’ But when you’re coming to someone else’s home, for example, it’s welcoming…so if you think about it, you shouldn’t be performing a check-in, but a welcoming.”
It may seem like a matter of semantics, but Valtr and his cofounder Matthijs Welle (now CEO) started Mews on the idea that good cloud-based software could actively improve the real-life hotel experience. The company has grown over the last twelve years and, now, Mews has raised $110 million at a $1.2 billion valuation, Fortune has exclusively learned. Kinnevik led the round, which included existing investors Revaia, Goldman Sachs Asset Management, and Notion Capital. LGVP also joined as a new investor.
Whatever idea you have of a tech founder, Valtr doesn’t fit the profile. He sounds British, but is Czech. And hotels run in his family—after the Berlin Wall fell, his mother developed hotels in the Czech Republic. And though for many years Valtr lived and studied in the U.K., he eventually found himself back home, working the reception desk (often at nights) and building the family hotel business. And he realized that software for hotels was outrageously outdated, all made in the 90s. There are lots of types of founder stories, but to distill Valtr’s down: He wanted to build software he’d actually use.
“Hoteliers themselves are creative, and the way we think about what we do is kind of like the iPhone,” Valtr told Term Sheet. “You’re trying to have something with all the functions you’d actually need to run a hotel, but make it super expandable.”
From the start, it was important to Valtr that the product be flexible. I asked Mews customer Peter Lawrence, owner of the Wythe Hotel in Brooklyn, N.Y., if Mews is like software Legos for hotels.
“It’s getting close to that,” said Lawrence, who in part attributes Mews’ success to the product being “intuitive” to millennials and Gen Z employees. “It’s like going to the App Store and shopping for the things that you want.”
Today, Mews has more than 900 employees and its primary competitors are entrenched industry players, Sabre Hospitality and Oracle Hospitality. The company’s annual recurring revenue is now $100 million, built on a 60% year-over-year increase. Mews has also been decidedly acquisitive, buying eight other companies to date.
Hospitality tech is an area that’s steadily attracted growing interest over the last decade, PitchBook data shows. In 2014, U.S. VCs did 32 deals in the sector. By 2021, that number was 87, and, in 2022, that number was 85. Last year was more muted in terms of deal count, coming in at 58. These aren’t mega deals by any means (total U.S. VC deal value only surpassed $1 billion in 2021 and 2022), but the opportunity for hospitality tech may not be limited to hotels.
Consider the high office vacancy rates plaguing U.S. commercial real estate. As Valtr notes, buildings don’t just vanish. If they’re vacant long enough, they’ll have to become something else and those properties will have to be managed, whatever they become, with software.
Hospitality tech as a sector is still relatively small. But companies like Mews are giving us a reason to check in.
This month’s cartoon…No way! It’s not possible! Here’s our cartoon for March by Ian Foley.
See you tomorrow,
Allie Garfinkle
Twitter: @agarfinks
Email: alexandra.garfinkle@fortune.com
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Joe Abrams curated the deals section of today’s newsletter.
Correction: The email version of this newsletter contained a typo misspelling Sabre.
VENTURE DEALS
- Anthro Energy, a San Jose, Calif.-based developer of batteries designed to be safer than lithium ion batteries, raised $20 million in Series A funding. Collaborative Fund led the round and was joined by Union Square Ventures, Ultratech Capital Partners, Energy Revolution Ventures, Emerson Collective, and others.
- Karma3 Labs, a Palo Alto, Calif.-based developer of a decentralized reputation protocol, raised $4.5 million in funding. Galaxy and IDEO CoLab Ventures led the round and were joined by Spartan, SevenX, HashKey, Flybridge, Delta Fund, Draper Dragon, and Compa Capital.
PRIVATE EQUITY
- Adenia Partners acquired The Courier Guy, a Kya Sands, South Africa-based courier service. Financial terms were not disclosed.
- Senske Services, backed by GTCR, acquired Turf Doctor, an Augusta, Maine-based lawn care and pest control services provider. Financial terms were not disclosed.
EXITS
- Direct Capital acquired Hiway Group, an Auckland, New Zealand-based provider of pavement and road stabilization services, from The Riverside Company. Financial terms were not disclosed.
OTHER
- Titan International (NYSE: TWI) acquired Carlstar Group, a Nashville, Tenn.-based manufacturer and distributor of specialty tires and wheels, for approximately $296 million.
IPOS
- Reddit is reportedly seeking a $6.5 billion valuation in its upcoming IPO with shares priced between $31 and $34, per The Wall Street Journal.
- NeOnc Technologies, a Westlake Village, Calif.-based developer of oral and intranasal brain cancer therapies, now plans to raise up to $82.5 million in an offering of 6 million shares priced between $11.25 and $13.75. Neucen Biomedical backs the company.
FUNDS + FUNDS OF FUNDS
- Avista Capital, a New York City-based private equity firm, raised $1.5 billion for its sixth fund focused on middle-market product and technology healthcare companies.
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