Hopper Sets Sights on Ambitious IPO Journey with a $10 Billion Valuation in View

Up till now, Hopper has secured over $740 million from backers such as Goldman Sachs Group Inc., Brookfield Asset Management Ltd., Citigroup Inc., and the Caisse de Depot et Placement du Quebec.

Investor Sentiment

According to Lalonde, a public listing, which he aspires to execute on both the Toronto Stock Exchange and Nasdaq, may assess Hopper’s value between $5 billion and $10 billion.

He established criteria for taking his firm public: it must achieve more than $1 billion in trailing sales — or be on the verge of reaching that milestone within 18 months — and must be profitable. Acting otherwise in a high capital cost landscape is “insane,” he asserted.

He refrained from disclosing how near the company is to fulfilling those objectives.

“I believe companies list prematurely. They fail to comprehend the mindset of public investors,” he said. “Small-cap tech can lead to disaster.”

The barriers to entry in the travel-reservation market are significant, stated Dan Wasiolek, a research analyst at Morningstar Inc. He noted that Hopper’s technology provides the firm “an advantage for the present” over rivals such as Expedia Group Inc. and Booking Holdings Inc. “However, considering the resources those larger companies possess, I would assume if they desire those functionalities, they could likely develop them internally.”

Lalonde mentioned he’s also receptive to investment from a private equity owner with a long-term capital strategy. In the meantime, secondary transactions have offered liquidity to investors and employees.

Canada’s market for initial public offerings has faced challenging times, experiencing a scarcity of new corporate listings. The largest offering in this timeframe came from fast-fashion retailer Groupe Dynamite Inc., which had a C$2.3 billion ($1.6 billion) valuation during its IPO last November, although the stock value has since fallen over 15%.

From Hacker to Entrepreneur

Lalonde, who lists “college dropout” in the education section of his LinkedIn profile, began programming at 13 and later became a hacker. In 1997, he co-founded Newtrade Technologies, a startup that revolutionized digital hotel reservation management.

Five years after, the company was acquired by Expedia, where Lalonde ascended to vice president. He departed in 2006, shortly after Expedia’s founders left, and spent a year snowboarding. “The innovation ceased almost immediately,” he reflected.

In 2007, he established Hopper, determined to innovate the flight-booking landscape. “It was somewhat of a moonshot,” his close adviser Guindi reflected.

A significant breakthrough occurred for Hopper in 2013, following the recruitment of a mathematician named Patrick Surry without a particular role assigned. “One Monday morning, he entered and announced: I figured it out,” Lalonde recalled. “He indicated: ‘I can inform you which day to book a ticket and save some money.’ We showcased this online, and someone from the New York Times wrote about it.”

The Hopper app debuted in 2015.

Lalonde “aimed to create the Expedia enhanced,” stated Sophie Forest, managing partner at Brightspark Ventures in Montreal, Hopper’s initial investor in 2007. Today, the firm holds about 7% of the company after selling a C$500,000 fraction of its stake for $50 million in 2020.

Hopper also garnered early funding from Boston’s Accomplice Management LLC and Toronto’s OMERS Ventures Management Inc.

“Hopper had chances to sell multiple times where we could’ve profited significantly with the founders,” Forest remarked. “We opted not to as the company was constructing something highly valuable, and we believe they continue to do so.”

–With contributions from Geoffrey Morgan.

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