Klook taps banks for potential $500m US IPO: sources

Klook, a Hong Kong-based travel booking platform, is preparing for a possible initial public offering IPO) in the US, according to people familiar with the matter.

The company, which is backed by investors including SoftBank Group and Goldman Sachs, has hired Goldman Sachs, Morgan Stanley, and JP Morgan to arrange the planned IPO.

Sources said the share sale could take place as early as this year and may raise about US$500 million, but the timing and size of the deal could change depending on market conditions.

It remains unclear whether the IPO would consist of new shares, an investor sell-down, or both.

Klook reported turning a profit in 2023 and raised US$100 million in a funding round led by Vitruvian Partners in February, though its valuation was not disclosed.

The firm competes with Booking.com, TripAdvisor, Trip.com, and Yanolja in the global travel booking market.

🔗 Source: Reuters

🧠 Food for thought

1️⃣ Travel tech platforms require substantial capital to achieve global scale

Klook’s journey illustrates the massive funding requirements for travel technology companies competing globally.

The company has raised over $625 million across multiple rounds since 2014, including $60 million in Series C in 2017, $200 million in Series D in 2018, and $225 million from SoftBank’s Vision Fund in 2019, before seeking an additional $500 million through its planned IPO 1 2 3.

This capital intensity reflects the challenges of building marketplace infrastructure across fragmented markets. Klook expanded from 30,000 attractions in 120 destinations by 2017 to 50,000 activities from 5,000+ partners across 200 destinations by 2018 1 2.

The company’s path to profitability took nearly a decade, only turning profitable in 2023, nine years after its 2014 founding. This demonstrates the extended timeline required for travel platforms to achieve sustainable unit economics at scale.

2️⃣ IPO timing aligns with broader market recovery favoring profitable tech companies

Klook’s IPO plans coincide with a significant rebound in public offerings, with 2024 seeing 1,340 IPOs generating over $126 billion globally, while US IPO proceeds increased 75% year-on-year 4.

The company’s 2023 profitability milestone positions it well within current investor preferences for established, profitable tech companies rather than high-growth, loss-making startups that dominated earlier IPO cycles.