Kayak Software Raises $91 Million, Prices IPO Above Range
Kayak Software Corp. (KYAK), the online travel company, raised $91 million in its initial public offering, pricing the shares above its proposed range. — The company sold 3.5 million shares at $26 each, according to data compiled by Bloomberg.
Context & Ripple Effects
Kayak is reaching the public markets five years after it consolidated travel-search rivals, including the $196 million raise and purchase of SideStep in December 2007, which turned a metasearch upstart into one of the category's scale players. Pricing 3.5 million shares at $26 — above the proposed range — and clearing $91 million is a direct read on institutional demand for consumer internet listings.
The pickup was broad for a mid-cap offering: Bloomberg's report traveled same-day through the Wall Street Journal, Reuters, MarketWatch and AllThingsD, which matters because an above-range print only sticks if secondary buyers show up behind the book.
First-order effects
- Kayak banks $91 million in new capital and enters trading with its valuation set by demand rather than bankers' caution, giving it currency for product investment or acquisitions in travel search.
- Underwriters and early investors capture immediate paper gains on the above-range price, validating the roadshow's demand signal.
Second-order effects
- Other venture-backed consumer internet companies weighing exits get a live benchmark: if Kayak trades well above $26, the window for comparable tech IPOs widens and their bankers gain a fresh comp.
- Rivals in online travel — from metasearch peers to incumbents like Priceline and Expedia — face a newly capitalized, publicly accountable competitor whose filings expose its traffic-acquisition costs each quarter.
Third-order effects
- If above-range tech prints keep landing, the pattern points toward a reopening IPO pipeline after years of thin public offerings, shifting power back toward growth-stage companies choosing between sale and listing.
- For online travel specifically, a public Kayak accelerates consolidation logic: scale players with disclosed economics become both acquirers and targets as the market prices distribution efficiency.
The trend: Consumer internet companies are testing whether public-market appetite has recovered enough to support above-range tech IPOs, with Kayak's print as one of the clearest 2012 data points.