附近上门

While the 2017 US IPO crop is following the 2016 cohort into the dustbin of history for being shallower than expected, there is still some life to be found.

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In that vein, today we are going to look at the only impending (traditional) tech IPO in the United States, the internationally-based and soon-to-be domestically listed聽Despegar.

Who?

Despegar.com on the New York Stock Exchange (NYSE) under the symbol “DESP” this month. The Brazilian company, , has raised $31.5 million in its life, including a $21 million round led by Sequoia in 2012. Expedia bought $270 million of聽Despegar shares in 2015, though it did not acquire voting rights with its stake.

The firm, founded in 1999, calls itself the “leading online travel company in Latin America,” according 聽It goes on to argue that the “underpenetrated Latin American online travel market” will grow to “approximately $47.6聽billion by 2020” from just under $30 billion in 2016.

That’s a lot of TAM (total addressable market) for the company to snap up. But how is聽Despegar doing more recently? Let’s find out.

The Numbers

Despegar is a slightly odd cookie. Let’s first take a look at its results, and then break them down into something closer to English:

Reading from right to left鈥攁s the table is set up such that time flows towards your port hand鈥攕ome notes:

• 顿别蝉辫别驳补谤听shrunk from 2015 (full year) to 2016, seeing its revenue falls from $421.7 million to $411.2 million.
• But, in the same time period, the firm cut its sales and marketing spend from $170.1 million to $121.5 million.
• That reduction in cost helped push the firm from a $67.3 million loss in 2015 to a $28.3 million profit in 2016.
• Off that better (in terms of losses) 2016 result,聽Despegar has ramped up marketing spend again in 2017, helping it grow revenue from $193.90 million in the first half of 2016 to $248.5 million in the first two quarters of 2017.
• The firm’s profit grew from $4.3 million in the first six months of 2016 to $25.1 million in H1 2017 on a pre-tax basis.聽Despegar lost around a half million in the first half of 2016 after it paid taxes. In the first half of 2017, its post-tax profit came in at $18.8 million.

This company looks healthy, growing both its core revenue drivers (air fares and travel packages). It’s also investing in sales and marketing while expanding its profitability. The company also grew its transactional volume in every region it lists (Brazil, Argentina, Other). That implies that the firm may, in fact, pick up a good chunk of the aforementioned TAM.

So that’s聽Despegar, a firm with $92.1 million in cash and an impending check. All that remains to ask is how much the firm picks up in its IPO (its F-1 lists $100 million, but that is likely a placeholder) and how that compares to its prior valuation.

IPO season! Kind of!