Luxury travel subscription brand Inspirato merged with publicly traded SPAC Thayer Ventures Acquisition Corp. on Wednesday, which will lead to an Inspirato (ISPO) public listing and a total valuation of US$1.1 billion. This news comes on the heels of Inspirato’s transition to become an entirely subscription-based company.
The transaction is expected to provide up to US$260 million in net cash proceeds, assuming no redemptions, including a committed PIPE (private investment in public equity) totaling approximately US$100 million. The PIPE is led by Janus Henderson Investors and Rodina, and includes additional incremental capital from Kleiner Perkins, IVP, company founders and certain other existing investors. There is approximately US$176 million currently held in Thayer’s trust account, assuming no redemptions by Thayer’s shareholders. Existing Inspirato shareholders will roll 100% of their equity into the combined company. The deal is expected to close in the fourth quarter of 2021.
Inspirato’s business model gives travelers a subscription inclusive of nightly rates, taxes and fees, while also giving hospitality suppliers, including big hotel brands like Ritz-Carlton, a way to monetize excess inventory through an opaque booking channel.
Proceeds from the transaction will be used to accelerate new subscriber acquisition, expand Inspirato’s property portfolio, advance its subscription technology, and invest in product extensions and adjacent luxury lifestyle markets.
Inspirato launched with a subscription model in 2011 under the leadership of Brent and Brad Handler. Over the past 10 years, the company assembled a portfolio of more than 385 exclusively managed branded luxury vacation homes and over 500 5-star hotel and resort partners in more than 240 destinations around the world. Inspirato has also developed a highly differentiated personalized service approach specifically designed to meet the needs of affluent travelers and drive exceptional customer satisfaction.
In 2019, Inspirato Pass was launched as a travel subscription inclusive of nightly rates, taxes and fees. Constantly updated, the Inspirato Pass list typically features more than 150,000 trips, ranging from Inspirato residences and hotel partners to custom experiences such as luxury cruises and African safaris.
Beyond its fast-growing Pass subscription, Inspirato also continues to grow through sales of its “pay as you go” Club subscription. Club subscribers pay a monthly fee for access to the Inspirato portfolio, and then pay subscriber-only nightly rates to book.
From the company’s inception through Q1 2021, Inspirato generated more than US$1.2 billion in revenue, with Pass and Club subscribers booking more than 850,000 total nights to date. It expects its annually recurring revenue to exceed US$200 million by Q4 2022.
The combined company will continue to be led by Founder and CEO Brent Handler, Founder and Executive Chairman of the Board Brad Handler, President David Kallery and CFO Web Neighbor. Chris Hemmeter, co-CEO of Thayer, will join the combined company’s Board of Directors.
UBS Securities is acting as financial advisor and capital markets advisor to Inspirato, and co-lead placement agent for institutional investors to Thayer. Wilson Sonsini Goodrich & Rosati is acting as legal advisor to Inspirato. Evercore Group is acting as lead financial advisor to Thayer and co-lead placement agent for institutional investors to Thayer. Stifel, Nicolaus & Co. is acting as lead capital markets advisor to Thayer and placement agent for institutional investors to Thayer. Cooley is acting as legal advisor to Thayer. Simpson Thacher & Bartlett is acting as legal advisor to UBS, Evercore, and Stifel in their role as placement agents for institutional investors to Thayer.