Hotel search site Trivago went public on Friday, after separating from Expedia. The company priced its shares at $11 and closed the day at $11.85, up 7.73%.
But this was after pricing at $11 per share, below the $13 to $15 range that had been forecast. The company raised $287 million in the offering and plans to use the capital to focus on growth and potentially make strategic acquisitions.
Trivago saw substantial revenue growth, bringing in $425.6 million in the nine months ending in September 2016. This compares to the $324.6 million seen in the full previous year. Their 2015 net loss stood at $42.8 million.
“We have grown very massively in the last year,” CEO Rolf Schromgens tells TechCrunch. In particular, he’s proud that they’ve “been able to grow in the most competitive market in the world, which is the U.S.”
Schromgens says about a quarter of their business is now in America. He explained that this focus on the U.S. market is part of the reason they chose to list on the Nasdaq.
It is a very competitive landscape with Kayak, Priceline and countless others looking to be the preferred site for travelers searching for hotels. But Schromgens hopes that their business model as a search platform instead of a booking site will help them attract the best inventory.
Trivago makes money by charging travel agents and hotels on a “cost-per-click” basis. The company said it brought about 487 million “qualified referrals” in the previous year.
Schromgens also believes there’s room for Trivago to improve their search algorithms, in order to ensure users find a hotel that they will be satisfied with. We want to “really build unique profile of each individual hotel and match that with user preferences,” he said.
Trivago has no plans to expand beyond hotel searches. “We don’t have to go to a vertical to solve another problem,” until the hotel search is perfected, Schromgens explained.
Expedia will still own a controlling stake in Germany-based Trivago. The two became linked after Expedia bought a majority stake in 2012 for $632 million.
Founded in 2005, Trivago previously raised funding from London-based HOWZAT Media.