Mews
The market
The hospitality software and payments market is large, sized at over $20 billion, and expected to grow at a double-digit CAGR until 2030. This growth is predominantly underpinned by two major trends: the shift from on-premise to cloud-based software, and continued labour shortage and high turnover among hotel staff.
In the last 15 years, many industries have adopted cloud-based solutions, but most hotels still rely on on-premise servers. When Kinnevik first invested in Mews, cloud penetration was around the mid-teens in most markets. Over the coming years, PMS cloud penetration is expected to grow rapidly across markets and match that of adjacent industries like restaurant software, where it is estimated at over 55%.
The hotel labour shortage, worsened by the COVID-19 pandemic, remains a persistent issue. Efforts to address understaffing have not kept pace with the rebound in demand. For example, U.S. hotels have seen a workforce decrease of nearly 10% in four years while maintaining pre-pandemic booking levels. As a result, hoteliers are looking to leverage technology to enhance operational efficiency and “do more with less'.
The company
The Mews platform is known as a Property Management System (PMS) and it forms the core of a hotel’s tech stack, de facto acting as its central operating system. From that platform position, Mews offers a tightly integrated ecosystem of services that: i) save hotel staff time in day-to-day operations; ii) help hotels increase revenue through a user-centric booking engine; and iii) provide hassle-free payment processing services through Mews Payments. Additionally, Mews is the most connected marketplace in the hotel industry, with over 1,000 integrations.
Since our initial investment, Mews has successfully executed its up-market expansion, with the majority of new sales coming from mid-market clients. As a result, Mews has achieved significant market penetration (20%+ in core geographies) in a historically fragmented market.
Mews is led by its founder Richard Valtr, and CEO Matthijs Welle. Together, they form a best-in-class and highly complementary team, with Richard’s vision driving product development while Matt focuses on flawless execution to build an enduring organisation.
The Investment Case
At Kinnevik, we believe that Mews is a perfect example of a successful vertical software business, with the potential to become a one-stop shop for all business needs in the hotel industry, resulting in increased client retention and revenue expansion.
Mews mission-critical nature as the “operating system” for hotels results in very low churn. Additionally, we believe that as Mews develops its product suite, the company has the opportunity to build an ecosystem of services where they can “land and expand”, increasing its addressable market over time. A prime example of this is the launch of multiproperty capabilities.
Above all, we fully believe the team’s vision to move away from traditional, unrepresentative measurements like occupancy or revenue per available room (RevPAR). Mews aims to rethink how both space and time are utilised within a hospitality venue.
