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Post IPO, Tripla strengthens hotel tech space with three acquisitions
For Tripla CEO and co-founder Kazuhisa Takahashi, life after the 2022 IPO won’t change much, although he admits he checked the stock price every day during the first six months after listing on the Tokyo Stock Exchange’s Growth Markets segment. , look at the investee’s comments.
“Now I’ve changed. I’m more concerned about growing our business and the need to achieve revenue and profit, which is more important than the daily stock price. And I still live in my small house and drive the same car,” Kazuhisa laughs , who founded Tripla in 2015 with founder Kaku Toriu (both formerly of Amazon.co.jp) to develop hospitality technology solutions for hotels.
The company originally planned to go public in 2020, when it was close to breaking even. “The Tokyo Olympics are coming up, so we thought that would be a good time. Instead, what’s coming is Covid-19,” Kazuhisa said.
He told WiT that despite poor market conditions, it was eventually launched in 2022 “because we thought now was the time where we could exit.” Early investors include hotel companies and venture capital funds, and it has raised about 120 million yen (about $7 million at current exchange rates) in five funding rounds. “They are pleased with the exit, which allows us to continue executing on our growth plans.”
Acquisitions cover Taiwan, Indonesia, Singapore and Thailand
Growth means expanding beyond Japan, and that’s one thing that’s changed Kazuhisa’s life – after making three acquisitions in the past six months, his business is now regional. In fact, he was in Taipei at the time of the interview and visited Surehigh International Technologies, an acquisition announced by the company in Taiwan last December for which it paid about US$3 million in cash. Founded in 1998, Surehigh provides booking engines and access management services.
In addition to Surehigh, tripla also acquired Endurance in Singapore and Thailand (for about $400,000 in January 2024) and BookandLink in Indonesia (for about $6 million in September 2023). The company also has offices in South Korea.
Kazuhisa said the acquisitions were funded by $5 million raised in the open market and loans from Japanese banks. “We borrow money for M&A purposes. Japanese banks are willing to lend and the interest rates are very low.”
Its M&A strategy includes acquiring competitors. “All companies are basically doing the same thing. Through integration and transformation, we can improve efficiency, build stronger products and safer products.”
In fact, Kazuhisa said that in the restaurant technology space, unlike e-commerce, there are no one or two giants dominating the market. “The hotel IT industry is very interesting. There are not so many giants, but there are many, many small companies, especially in Southeast Asia, fighting with each other. There are 10-20 companies in Thailand and 30-50 in Japan, which is very fragmented.
“But if you think about e-commerce, it’s very integrated. For a new startup like us, the opportunity for integration is huge.”
People might view Yanolja Cloud as a giant, given that it raised $170 million in 2019, but Kazuhisa doesn’t see it as a competitor. “They are more B2C and we can work with Yanolja. We are not interested in B2C.” The company also looks at brands such as Mews and Siteminder, but believes it is uniquely positioned for consolidation in the Asia-Pacific region.
In the fiscal year ending October 31, 2023, the company recorded operating income of 1.176 billion yen, an increase of 43.8% over the previous fiscal year.
Through these acquisitions, tripla has doubled its current customer base to 6,000 and is looking for opportunities in markets such as Malaysia, Vietnam, Australia and New Zealand.
“We don’t make mistakes like other Japanese companies”
Expansion outside of Japan has also prompted Kazuhisa to look at the business from a different perspective. He now recruits engineers in Indonesia rather than Japan for cost reasons, and he hopes to build a more diverse management team, which currently has 30 all-Japanese employees based in Tokyo. “After the IPO, we can add more international talent, more women. We can become a more global company.”
He said he would not make the mistake of hiring Japanese executives to run overseas offices, as other Japanese companies have done. “We want local people to run the local offices,” he said, adding that Tripla will retain the full teams of Surehigh, BookandLink and Endurance. Pricing models will also be localized based on market demand.
He and founder Kaku founded Tripla in 2015 after getting tired of selling fashion products on Amazon. “We had to count physical inventory every day. We wanted to do something in a growing industry other than e-commerce, and we thought about the growing inbound tourism industry in Japan.”
They developed a restaurant menu ordering app called “umami”. “We want to do for Japanese restaurants what McDonald’s is doing — you click your order and the Big Mac comes. When I go to izakayas to talk about app service, everyone says to me, ‘Kazu, no Japanese customer will Use it. If they want to drink beer, they’re not going to use their smartphone.”
“Everyone is using it now.”
Amazon’s past experience leads him to believe that consumers will want to book hotels directly rather than through OTAs
Not one to cry over a spilled beer, the two co-founders visited Japanese hotel group Fujita Kanko on a fundraising call, who asked them to develop an AI chatbot service for them, and Tripla Bot was born. in 2017. It added booking functionality to the chatbot, integrated it with channel managers, and released a booking engine in 2019.
Prior to the COVID-19 pandemic, restaurant revenue had been increasing, but during the pandemic, demand for technology solutions increased. In Japan, the company has 3,000 customers (80% of which are hotel chains and 20% are independent hotels) using its solutions covering chatbots, booking engines, CRM and marketing automation.
In addition to international expansion, tripla is looking to develop multiple layers of services into its solutions. “Our goal is to help hotels increase direct bookings and improve customer service.”
He said that although OTAs have become more and more powerful in recent years, he believes “this situation will change.”
“When I partnered with Amazon.co.jp, I told fashion companies that you must sell through Amazon.co.jp in the future. I was wrong. Many customers want to buy fashion products on the direct website.
“The same goes for hotels – they know who their customers are, what they want and what information they need to provide. OTAs are good at acquiring new customers through marketing. It’s difficult for hotels to build their brands through OTAs.”
He said that while “artificial intelligence will not set the industry on fire,” it can help increase productivity and enhance AI chatbot services. “But we still need humans to welcome people to the hotel.”
He realized that post-acquisition integration could be painful and could go wrong, so he made it a top priority. “We now have several companies – we need to consolidate services and products – and move in one direction.”
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