Kayak raises $196 Million and buys rival SideStep

 

 

Discount travel site Kayak has acquired rival SideStep for $200 million. This story was set to be announced tomorrow but word is leaking all over the place after Sidestep CEO Rob Solomon told his company employees the news at an all hands meeting.

This is a two part deal. Kayak raised $196 million in a new round of financing from their existing investors (Sequoia Capital, General Catalyst Partners and Accel Partners), two of SideStep’s existing investors (Norwest Venture Partners and Trident Capital), new investors (Oak Investment Partners and Lehman Brothers Venture Partners) and debt lenders (Silicon Valley Bank and Gold Hill Capital). Prior to this new round, Kayak had raised $27 million in capital.

Kayak subsequently acquired SideStep. Terms are not being disclosed, but we are hearing that the deal was for $180 million in cash. An additional $20 million that SideStep holds in cash is being distributed as well, making the total deal size around $200 million.

SideStep and Kayak are the two leaders in the discount travel search space (along with Mobissimo and Farecast). Kayak is reportedly doing around $50 million in yearly revenues, compared to SideStep’s $35 million.

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