Online travel site Hipmunk announced on its blog today that it has raised $15 million in Series B funding. The round was led by Institutional Venture Partners and includes Series A investor Ignition Partners. Hipmunk was founded in September 2010 by Adam Goldstein and Steve Huffman, founder of reddit, (which was acquired by Conde Nast in 2006). Hipmunk previously raised $5.2 million in venture funding from Ignition Partners, Y Combinator, SV Angel, Webb Investment Network and individual investors, including Erik Blachford, Simon Breakwell, Rob Glaser, Jim Hornthal, Rich Barton, Paul Buchheit and Ashton Kutcher. Its first round of funding closed in January 2011.
Announcing Hipmunk’s $15M Series B Funding
We’ve got fantastic news today and are excited to share it with all of you whether you’re a loyal fan, travel enthusiast, part of the tech and investment community or just part of the greater hipmunk family. Two months shy of our two-year anniversary, we are thrilled to announce we’ve raised another round of venture capital—this time led by Institutional Venture Partners (IVP). This round, our Series B, will total $15M and includes a re-up from our Series A lead, Ignition Partners. The Forbes Midas List regular and general partner at IVP, Todd Chaffee, will join our board as the fourth member.
When we launched in August 2010, we were a fledgling Y-Combinator startup with just Steve and me as co-founders and the full team. We hired a few more engineers, and in February 2011, we announced our first round of institutional funding from Ignition Partners. The amazing Brad Silverberg from Ignition joined our board then, and we also gathered the ex-Expedia “mafia” (Rich Barton, Eric Blachford, and Simon Breakwell) who have acted as advisors and provided a wealth of travel industry knowledge.
Both our team and product offering have grown tremendously over the past two years. We’ve expanded to mobile apps, launched hotel search, enabled user accounts, grown our airline and hotel supplier portfolio, and now have 16 employees.
As a private company, we don’t release specific numbers, but we can tell you that we’re doing better than ever. Our traffic has increased dramatically over the last year, mobile downloads are growing, and we even have revenues.
So, what will we do with this capital? Well, we’re not going to spend it all in one place or all at one time; we’re going to be thoughtful. Here’s our initial thinking:
- We’re hiring! We know there’s a lot more we can build to make travel funner-er. In order to continue growing, we need to build amazing products simultaneously, not just one at a time like we’ve done. Therefore, we need more engineers.
- We’ll make some investments in business development and marketing to drive partnerships, awareness and trial. We’ll be hiring a few roles in these departments to make that all happen.
- Finally, we need to go big or go home, and in our case, going big means building a product that’s more complete than any other tool. Keep an eye out for major announcements in the next few months.
As for “hipmunking” other verticals, to be honest, we’ve contemplated it, but we decided it best to stay focused on travel for now. We need to perfect the experiences we’ve already created for our users, become the best at hotel and flight search, and then develop ways to shake and rattle other aspects of travel. We think our users will appreciate us improving upon the experience they already know and love, and we’ll be able to attract new users with our updates.
So why Todd and IVP? We met Todd a while back as he was always a big fan of our product and our team. He’s a top-notch investor having made incredibly successful investments in both the travel and tech space, including HomeAway, LivingSocial, and Netflix. We know Todd will bring that deep experience and industry insight to our board, and we’re excited to have him on the team.
What we really found interesting about IVP is that they usually invest in later stage, proven companies and enter deals during Series C and D rounds. This being our Series B, we knew IVP saw something special and unique in our product and team, and we were flattered (and thrilled) by their vote of confidence. They will be a great partner for us.
And we are confident we can use this added capital to build an exceptional team and even more exceptional product. As always, we’re listening, so let us know about any ideas you have for the site or features you’d like to see.
Finally, I want to extend our sincerest thanks and appreciation for using our site and being a loyal fan. Whether you’ve been with us since the beginning, or are just discovering us; whether you’ve tweeted your love or were converted through our live chat, we thank you for being a part of the hipmunk family in some form and hope you continue on this crazy ride with us!