Stay22 Technologies Inc., a Montreal company whose technology is used by online travel influencers to cash in on bookings made by their followers, has brought on U.S. growth-capital giant Summit Partners as an investor.
Summit has invested US$122-million for a minority stake in Stay22, which generates between $70-million and $100-million in annual revenue. The financier is primarily buying shares from early investors and employees in a secondary transaction. Stay22 chief executive Andrew Lockhead declined to disclose the valuation in an interview, but a source familiar with the matter said the deal values Stay22 at more than US$300-million.
The Globe and Mail is not identifying the source as they are not authorized to discuss the matter.
Mr. Lockhead co-founded Stay22 with chief innovation officer Hamed Al-Khabbaz in 2016 after they couldn’t find a place to stay for an e-sports event in Germany. They found the process of switching between tabs to be cumbersome and built a program to make it easier for people travelling to events to book their stays.
That fledgling business all but collapsed with the onset of the COVID-19 pandemic, and a venture capital financing that had been negotiated but not yet closed fell apart as investors bailed. That left the co-founders determined not to raise venture capital again, said Mr. Lockhead; Stay22 had only raised US$1.5-million before the Summit deal.
By 2021, they had pivoted the business to serve travel bloggers and online video influencers. Stay22 created technology that saved them the hassle of piecing together links to travel booking sites that they embedded within their posts, giving them an affiliate commission when followers click through to make their travel plans.
Stay22 embeds a script on its customers’ sites, adding monetization links to the regular links. The process is done automatically using artificial intelligence, which also reads or watches the posts and determines where to drop in links to booking sites, based on content. The system automatically directs users to optimal booking sites depending on the market.
Stay22’s use of AI and automation that replaces a time-consuming process for its customers “is how we managed to grow so fast and scale,” Mr. Lockhead said.
The company has more than 5,500 customers and has doubled in size in each of the past two years. It ranked 31st on Deloitte’s most recent list of Canada’s fastest-growing technology companies, growing by 1,008 per cent over three years, through the end of 2024. Stay22 processed more than US$1-billion in transactions last year, the company said in a release.
“We believe Stay22 is building essential infrastructure at the intersection of travel, content and commerce,” said Summit managing director Colin Mistele in a statement. “As creators and publishers become more central to demand generation, the need for intelligent, scalable monetization tools has become critical. Stay22’s platform, team and execution stood out to us, and we’re excited to support the company as it continues to grow profitably and expand its global reach.”
While Stay22 is profitable, Mr. Lockhead said the company decided to take on Summit, which has previously invested in Canadian technology companies Jobber and StackAdapt, because of its experience in guiding companies through their growth phase, and to gain access to the financier’s other portfolio companies in adjacent areas.
Mr. Lockhead said Stay22’s next move is to expand globally and build on its recent foray into retail: It now adds links to its customers’ posts so their followers can buy goods as well. “People only purchase travel twice a year, why not sell them something else?” he said, adding that the conversion rate on purchases “is way better” than travel.
Editor’s note: A previous version of this article incorrectly identified Hamed Al-Khabbaz as Stay22's chief information officer. He is the company's chief innovation officer. This version has also been updated to correct the spelling of Stay22 in one instance.