Heading into its initial public offering of stock, Kayak Software Corp. quietly secured a lease at a small building in Stamford”™s Harbor Point development as a new headquarters.
Kayak, long based in Norwalk, raised $91 million in its July 25 IPO, with shares of the travel website company immediately rising from a sale price of $26 to above $33. Kayak had delayed its IPO after Facebook Inc. shares dropped in value following its own May debut as a public company.
Kayak secured a lease for offices at 7 Market St. in Stamford, with the building totaling 18,000 square feet of space on two floors and a mezzanine level. Kayak executed the lease with an affiliate of Building and Land Technology, the lead developer for Stamford”™s Harbor Point district and the former Yale & Towne factory properties that includes the building at 7 Market St.
It is only the latest coup for Building and Land Technology, with Harbor Point drawing the headquarters offices for Starwood Hotels and Resorts Worldwide Inc., upscale furniture purveyor Design Within Reach and Louis Dreyfus Highbridge Energy.
Kayak”™s initial lease is for 12 years with rents steadily escalating from $63,000 a month to just over $74,000 in the final year of the deal. Kayak holds two options for five-year extensions. As part of the deal, Building and Land Technology is planning nearly $1 million in renovations.
At its current 55 North Water St. headquarters in Norwalk, Kayak to date has required just a third of the space its new quarters offers. CEO Steve Hafner runs the company from Connecticut, while CTO Paul English manages Kayak”™s larger technology operations center in Concord, Mass.
With IPO proceeds totaling more than $86 million after payments to investment banks and other expenses, Kayak has a fresh cache of cash upon which to draw ”“ with apparent implications for its local presence given its new, expanded quarters in Stamford.
At press deadline, Kayak had yet to release its second-quarter results. In the first quarter, the company earned $4.1 million as sales increased 39 percent to $73 million.
In its public filings and some other venues, Kayak, Hafner and English have warned of the potential ramifications of Google Inc.”™s 2011 acquisition of ITA Software Inc., a Cambridge, Mass., company whose software handles back-end bookings for airlines. Microsoft Corp. has also made aggressive moves into the online travel sector.
“The online travel category is the biggest category by far ”“ equal in size to almost every other ecommerce category combined,” Hafner told Bloomberg Television last month. “We actually have a partnership with Google and a partnership with Microsoft, so overall we feel very confident in our prospects ”¦ I think we”™ll do just fine.”
With $86 million in its pocket, Kayak is now navigating its own options for expansion, including international opportunities. In May, the company opened an office in Zurich, Switzerland.
“I think one of the things people are excited (about) Kayak as a company is the scalability,” English said. “If you look at the revenue-per-employee, our productivity against not only online travel sites, but even general search engines, we rank pretty high. We”™re continuing to scale users and revenue, and we don”™t think we actually need to expend a lot more money in running the company. Right now we”™re just taking profits coming in and putting that into more and more marketing.”
