Blackstone to Invest in Hotel Tech Company, M3 – ‘Many More’ Deals to Come

Skift Take

There’s a lot of opportunity for strategic growth investment in travel tech, and Blackstone wants to jump in.

Justin Dawes

Blackstone said Thursday that it plans to acquire a majority stake in hotel accounting tech company M3 — and more deals in travel tech likely are coming.

The Asian American Hotel Owners Association, which says it represents nearly 20,000 hotel owners and 60% of hotels in the U.S., is making its first-ever investment alongside Blackstone.

Georgia-based M3 offers back-office hotel software for accounting, labor management, and business intelligence, as well as accountants for hire. The company has more than 1,000 hotel operators and management companies as clients, representing more than 8,000 properties in North America.

The deal is going through Blackstone Growth, the company’s strategic growth equity business. The unit previously invested in a $65 million series B round for Hotel Engine in 2021, which makes M3 the second travel tech company in its portfolio. 

“Hopefully second of many more,” said Ramzi Ramsey, managing director for Blackstone Growth. “We’re pretty excited about the category. There’s a lot to do in travel tech.”

Other Blackstone Growth investments have included Cloudinary and Dynamo. A separate internal business unit last year acquired Cvent for $4.6 billion. 

What’s Next for M3

This is the first equity investment that M3 has taken, according to a statement from M3 founder John McKibbon. The price and terms of the deal were not disclosed.

“This is a shareholder liquidity sort of an event because the business is profitable,” Ramsey said. “And so the number one thing for us is growth with the business.”

Ramsey said there are plans to add new back-office products for hotels. 

But there’s an immediate opportunity to push existing products with owners and operators of Blackstone’s $336 billion hotel business, which includes the Motel 6 and Extended Stay brands under G6 Hospitality.

“We got conviction here because we called a bunch of our properties. Motel 6 is one of our investments, and a lot of the owners there use M3 and gave us positive feedback,” Ramsey said. “I didn’t know who M3 was until we spent time with our hotel portfolio.”

There’s also a big opportunity to market to AAHOA members, many of whom own only one hotel. Individual hotel owners are one of the last groups to digitize operations, and Ramsey said that group has been hard to reach because owners often are doing multiple jobs. 

“They really take the advice of their trade association as almost gospel,” Ramsey said. “So I can’t underscore the importance of [AAHOA] making this their first investment ever.”