Momondo Group Notches $30 Million in Q1 Revenue, Thinks It's Entered Top Tier
London-based Momondo Group, which includes Momondo and Cheapflights, notched $30 million in first quarter revenue, a 23 percent year over year jump, and officials think it finally merits mention among the top-tier global metasearch players after several challenging years before Cheapflights Media acquired Momondo in 2012.
“Our first quarter results for 2016 have caused us to be even more bullish about the year ahead,” said Hugo Burge, Momondo Group CEO. “They cement our position as a leader in global travel metasearch.”
Burge concedes that Momondo Group is one of the smaller global players — perhaps half the size of Skyscanner, which itself pales in comparison to the size of Kayak, for example. While both Momondo Group and Skyscanner are privately held companies, hotel-only Trivago, which is part of publicly traded Expedia Inc., did $176 million in revenue in the first quarter.
Still, as both Momondo — fueled by TV advertising in the Nordics, Germany, and Portugal — and the relatively new metasearch-oriented approach of Cheapflights, which has been showing strength outside its UK base in Australia, New Zealand, Canada, and several African countries, are showing momentum, Burge says.
The Momondo brand generates about 60 percent of the Group’s revenue, says CFO Alan Martin, and the Group projects full-year 2016 revenue growth of 30 percent. The company is profitable, Burge says, although it is clearly in investment and expansion mode with Great Hill Partners holding the majority stake in Momondo Group.
Burge believes the Momondo Group differentiates itself from the pack through its passionate and edgy advertising and overall approach, its decision not to jump into assisted bookings for now, and its tack to offer “true,” unbiased metasearch.
Without naming names — TripAdvisor and Kayak come to mind — Burge said Momondo and Cheapflights largely don’t take a sponsored or or an advertising approach to showing flight (Cheapflights) or flight, hotel and car (Momondo.com) results but sort results on “consumer criteria,” including price, conversion and the user experience of partner sites.
Most of the revenue is based on transactions (cost per acquisition) rather than advertising (cost per click), Burge said.
Now that Momondo Group is in the lead pack, according to Burge, it means that the company can invest in metasearch at scale. The company can’t spend as much as the largest players on advertising so it is focusing on generating loyalty in the form of repeat visitors, he adds.
Driven by TV advertising in 10 European countries and increased online marketing spend, the company states that 40 percent of traffic to the Group’s sites came from direct visits in the first quarter, and that’s a 100 percent increase compared with 2011.
Momondo Group, however, is still a relatively small fish in a big pond when measured against the larger players. Burge said the company keeps its head down and can’t be too concerned about things it can’t control — such as moves by Google to play a larger role in the travel ecosystem.
Says Burge: Smaller, national metasearch players are struggling these days while the trends are much better for global players like the emerging Momondo Group.