TA Associates Announces Investment in Plusgrade
BOSTON - TA Associates, a leading global growth private equity firm, today announced that it has completed an investment in Plusgrade, a leading provider of revenue solutions to the travel industry. Financial terms of the transaction were not disclosed.
Founded in 2009, Plusgrade helps airlines manage and optimize revenue generated from seat upgrades and other premium services. Through the company’s proprietary software-as-a-service platform, airlines are able to capture incremental, high margin revenue from unsold inventory and enhance the passenger travel experience. Plusgrade’s products are fully white labeled and integrated into existing airline reservation systems. The company serves more than 35 premier airlines globally and has established its market-leading position by focusing on customer service and innovation. Plusgrade has offices in Montreal, Canada and New York.
“We are very pleased to have TA Associates as an investor and to welcome them to our Board as we enter this next phase in the evolution of Plusgrade,” said Ken Harris, Founder and CEO, Plusgrade. “Ancillary revenue and merchandising is now a key component of every airline’s core strategy, and with the aid of an experienced investor like TA, we are confident we can continue to innovate, lead and build upon the meaningful revenue streams and enhanced customer experiences for which our signature solutions are known.”
“Plusgrade’s robust solution for generating incremental revenue from existing passengers has proven very attractive to air carriers,” said Jeffrey A. Del Papa, a Principal at TA Associates who will join Plusgrade’s Board of Directors. “Plusgrade has had significant growth and momentum, expanding relationships with existing partners and signing additional airlines at a rapid pace. With a strong value proposition and an appealing model that requires no capital investment from its customers, we are enthusiastic about Plusgrade’s continued growth prospects.”
Consulting firm IdeaWorksCompany estimates that $49.9 billion, or 6.7%, of global airline revenue came from ancillary revenue streams in 2014, up from $22.6 billion in 2010. In addition to premium seat assignments, ancillary revenue sources include additional offerings such as early boarding, checked baggage and commissions from hotel bookings and car rentals.
“While experiencing overall growth, the airline industry remains cyclical and carriers continue to seek opportunities to enhance their profitability and margins,” said Kurt R. Jaggers, a Managing Director at TA Associates who will also join Plusgrade’s Board of Directors. “As a result, airlines remain focused on finding additional opportunities to optimize revenue. With upgrades and other ancillary offerings typically yielding margins greater than those from ticket sales, we expect to see continued demand for the types of products and services that Plusgrade provides.”
“We are thrilled to be backing Ken Harris and the leadership team and employees at Plusgrade,” added Jason S. Mironov, a Senior Vice President at TA Associates who will also join Plusgrade’s Board of Directors. “The team has done an impressive job establishing Plusgrade as a market leader, and we look forward to supporting the company through this next phase of expansion.”
Stikeman Elliott LLP and Goodwin Procter LLP provided legal counsel services to TA Associates. Davies Ward Phillips & Vineberg LLP and Greenberg Traurig LLP served as legal counsel to Plusgrade.
Plusgrade is the market leading provider of upgrade solutions, a key segment of the fast-growing ancillary revenue and merchandising sector in the global airline industry. The Company’s software solutions provide its global base of customers with meaningful incremental revenue and controls, allowing them to enhance and optimize revenue across classes of service. Plusgrade’s proprietary SaaS platform has received accolades from industry-wide participants and many distinguished media publications. Founded in 2009, Plusgrade has offices in Montreal, Canada and New York. For more information, please visit www.plusgrade.com.
About TA Associates
TA Associates is one of the largest and most experienced global growth private equity firms. The firm has invested in more than 450 companies around the world and has raised over $18 billion in capital. With offices in Boston, Menlo Park, London, Mumbai and Hong Kong, TA Associates leads buyouts and minority recapitalizations of profitable growth companies in the technology, financial services, business services, healthcare and consumer industries. More information about TA Associates can be found at www.ta.com.