| SAN FRANCISCO, Sept 5
SAN FRANCISCO, Sept 5 Technology hedge fund
Coatue Management has led a $45 million funding round into
accommodation service HotelTonight, the latest example of the
burgeoning interest among hedge funds in Silicon Valley
HotelTonight, which allows travelers using smartphones to
book rooms at the last minute, plans to use the cash to further
expand around the world, including Asia. It announced the news
in a press release.
The founders aim to boost discretionary hotel stays, in
which a guest did not necessarily need to stay in a hotel. That
market currently represents just 15 percent of the hotel market,
said HotelTonight co-founder Sam Shenk in an interview Tuesday,
but he believes it could rise to about 25 percent over the next
"If we could make it very easy and convenient to book a
hotel, we could generate demand," Shenk said, describing his
thinking when founding the company in 2010.
Unlike discount sites such as Priceline and
Hotwire, HotelTonight allows customers to book only for stays
beginning the same day. It works only through a smartphone app.
A check on Tuesday showed availability at establishments
like the Ace New York, the Hollywood Roosevelt, and Le Meridien
Coatue is making the investment from a new $375 million fund
dedicated to private technology companies, according to the
release. GGV Capital also participated, along with existing
investors Battery Ventures, Accel Partners, US Venture Partners,
and First Round Capital.
Other hedge funds that have recently made bets on privately
held Silicon Valley companies include Tiger Global, which in May
invested $50 million in Automattic, the company behind the
WordPress blogging service. In January, Tiger Global led a $444
million equity investment in online survey company SurveyMonkey;
in April, it led a $60 million financing round for online
ticketing service Eventbrite.
Last year, General Atlantic invested $100 million in
cloud-storage company Box and $50 million in apps-consulting
With companies waiting longer to go public, more of the
gains in valuation take place before their initial public
offerings, hedge fund executives say, increasing their
motivation to invest while the companies are still private.