At WIT Japan & North Asia 2017, the mood among investors was pretty bullish. Those attending were clear that the climate was hotter than average for investments and acquisitions throughout Asia.
Recruit Holdings, in particular, whose corporate director of global development, Aya Yamato, was on the panel of judges for the Start-up Pitch, continues to demonstrate an appetite to expand its travel vertical, and is among the travel companies in Asia that are being watched for their acquisition activity.
True enough, right on the heels of the event on June 8, Recruit Holdings Co., Ltd announced the acquisition of TrustYou, the German-based guest review platform, to make more of a stamp in the hospitality sector.
It’s a good payoff for the co-founders of TrustYou, Jakob Riegger and Benjamin Jost, who have been investing in the Japanese market for the past few years.
At this year’s WIT, Michael Menzel, its chief revenue officer, was on a panel, reiterated the growing importance of user reviews and scores on influencing traveller decisions, and how this data would play a critical part in hospitality distribution.
During a panel featuring local OTAs, Kenichiro Miyamoto (executive manager, Recruit Lifestyle) shared the news that Recruit had set up a leisure activity portal to sell experiences and was happy with the traction thus far.
While he said they had expected stronger growth in reservations revenues in 2016 – revenues grew 6% – he said he was not unduly alarmed by the growing power of global OTAs into Japan because Recruit was focused strongly on the domestic market.
Michael Menzel, chief revenue office and VP, TrustYou at WIT Japan & North Asia
It is interesting that user review players are finding their exits in Asia. Earlier this year, ReviewPro was acquired China’s Shiji at a US$35m valuation. Last year, TrustYou acquired the Asia-based Brand Karma’s user review tool and the rest of Brand Karma’s business was then absorbed into a joint venture with the Singapore-based Silver Needle Hospitality Group.
TrustYou was founded in 2008 and currently operates from five headquarters around the globe: Germany, Romania, United States, Singapore, and Japan.
It collects and analyzes approximately 100 million reviews every year for hundreds of thousands of hotels across the globe. The platform is used by a large number of independent hotels as well as major global hotel chains such as AccorHotels, Best Western, NH Hotels, and Mövenpick Hotels. TrustYou’s review summarization and ranking data are used by numerous search and travel sites, such as Google Search and Maps, KAYAK, Skyscanner or Hotels.com.
Jost, CEO at TrustYou, states: “We meticulously searched for a partner who would help support and execute TrustYou’s vision to build the world’s largest guest feedback platform while allowing us to run the company as independently as before. With Recruit, we found a partner that is eager to support us with its financial resources and knowledge which will give us the necessary boost to accelerate future growth, be it organically or via further acquisitions.”
Recruit expanded outside of Japan starting in 2009 with the goal to discover “Opportunities for Life” around the world. Recruit brings the principles of entrepreneurship and a strong sense of ownership to all their business holdings with their vast portfolio of software companies across ten major industries.
“TrustYou sparked our interest three years ago with its unique technology and product portfolio, as well as its highly successful, entrepreneurial team. Its remarkable growth from a small start up to a globally operating company is very impressive to us and we see a high potential for further growth and expansion. We are very committed to providing TrustYou with the necessary resources it needs to spearhead our big ambitions in the hospitality and travel market,” adds Yoshihiro Kitamura, Head of Media and Solution Strategic Business from Recruit Holdings.
Left to right: Aya Yamato (Recruit Holdings); Zhou Shiwei (Ctrip); Phil Wickham (Sozo Ventures)
It follows a trend of acquisitions in Asia by Asia-based companies, suggesting that the travel market’s growth in the region is largely attributable to local players rather than international focus on the region. It begs the question of: when will international players enter Asia and claim some stake of the market for themselves?
During an investor’s panel, Phil Wickham, the co-founder of venture capital firm Sozo Ventures, remarked that the only big Silicon Valley VC company with a firm presence in South East Asia is Sequoia Capital. Excluding China, Wickham argued that hesitation to invest in the region could largely be put down to the fact that markets are still very young and “there isn’t enough history behind innovation.”
Nevertheless, the appetite for acquisitions stretches throughout Asia. In fact, just this week, Indonesian e-commerice site, Blibli, announced their 100% acquisition of local online travel agent, Tiket, which allows customers to book flights, rail, hotels, car rentals and even concert tickets. How this will impact Tiket’s edge over local competitor Traveloka, is yet to be seen.
The full details of the acquisition are still unclear, however co-founder Mikhael Gaery Undarsa made clear that ““all the management team will stay intact. Everyone will retain their original position.” One key change though, is that business development director of Djarum Group (a key Blibli backer), George Hendrata, will be appointed as Tiket’s new CEO.
Images courtesy of @viktorchenovsky
