Stayntouch historically has been focused on independent hotels, but now it wants to take on Oracle Hospitality and sign some more big players.
Stayntouch, the property management startup owned by hotel company MCR, has raised $48 million in venture capital.
The investment came solely from Sixth Street Growth, whose portfolio includes Airbnb, Spotify, the parking app Passport, fintech company Stripe, and others.
Stayntouch is a cloud-based property management system, the type of technology that hotels use to handle operations, such as check-in and check-out, payments, and housekeeping.
The company said revenue has grown 53% in 2023 compared to the prior year, driven by hotel groups, property management companies, and independent hotels.
The funding will go toward expanding in the U.S. and Europe, particularly Germany, the U.K., and France.
And Stayntouch is also considering acquisitions of other property management systems or other hotel tech products, according to Jacob Messina, who started as CEO of Stayntouch in September 2022.
“There’s a lot of great tech in the space that we think could find a nice home and be a nice fit with our customer base. We don’t feel the pride of authorship in terms of having to build something just for the sake of building it. So that’s where we’ll look to either partner and/or acquire where it makes sense.”
Stayntouch said it has received over $200 million in investment since it was founded in 2012. That includes $15 million that MCR invested after it bought Stayntouch in 2020, which led to an upgrade of the platform to include payments, a booking engine, channel manager, and the ability to manage a chain of hotels.
Tyler Morse, CEO of MCR said last year that all of the company’s properties were using Stayntouch.
MCR says it has a $5 billion portfolio of 150 hotels totaling 25,000 rooms, including the TWA Hotel, the High Line Hotel, and the Pasadena Hotel and Pool.
Other Stayntouch clients include Sage Hospitality, HEI Hotels & Resorts, EOS Hospitality, Stoney Creek Hotels, Village Hotels, Pod Hotels, and First Hotels.
Stayntouch did not say how many rooms are under its system now. Morse last year said it was about 100,000 worldwide.
Stayntouch has plenty of competition from other cloud-based property management systems.
Oracle Hospitality, the industry’s main legacy property management company, has been pushing its own version of the cloud-based product that it released over four years ago. Oracle Hospitality is working on integrating its system into another 2,000 Wyndham properties by the end of next year.
The startup Mews raised $185 million a year ago and Cloudbeds raised $150 million in 2021.
The startups have traditionally focused on independent hotels, as has Stayntouch, but Messina sees Oracle’s system as his company’s biggest competition. Stayntouch has been focused on adding more clients with multiple complex properties, selling tech capabilities that have been released over the past year.
“The best part about it for a lot of our customers that are expanding rapidly is that it significantly cuts down the onboarding time by about 70% in terms of standing up a new property,” Messina said.
Experts have said that the main source of competition, however, is low-tech systems that hotels have been using for decades.
The benefit of newer cloud-based systems is that they typically are more user-friendly, they are easier and cheaper to implement, and they enable easier connections to third-party tech products that hotels may use. Stayntouch can connect with more than 1,100 other products, for example, and that number is expected to grow.
Though the industry is shifting to these newer systems, there’s a lot of catching up to do.
As Morse of MCR said during the Skift Future of Lodging Forum earlier this year: “I describe hotel technology as a carrier pigeon and a stone tablet having mated. It is brutal. It is simply awful. When I built the TWA Hotel, I had to source 65 different software systems, and then I had to stitch them all together.”