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Search - Thursday, December 20, 2007

Kayak Pays $200M For Rival Sidestep

Investors have concluded that 1+1=3. Kayak and Sidestep are now one with Sidestep investors accepting about $200M for their stake. To pay for the deal, meta travel site Kayak has raised $196M. Techcrunch says that backers are existing investors Sequoia Capital, General Catalyst Partners and Accel Partners as well as from SideStep’s existing investors Norwest Venture Partners and Trident Capital), new investors. Outsiders Oak Investment Partners and Lehman Brothers Venture Partners also joined the party.

Is this a coming out party for the meta travel search sector or a move of desperation? Our first instinct was that startups that know they are kicking it tend not to want to merge with their rivals. Forrester Research seems to confirm our gut saying that the sector has plateaued. For sure, there is money to be made here but not made money so backers seem to have concluded that they need to thin the field to attract buyers or maybe even lure Wall Street.

Read - WSJ