Montréal-headquartered Plusgrade has reportedly changed hands as New York-based private equity firm General Atlantic made a significant investment in the ancillary travel revenue company.
CDPQ declined to disclose transaction details of the transaction to BetaKit, but according to reporting from The Globe and Mail, the deal is worth more than $1 billion and values Plusgrade at over $2 billion, with General Atlantic buying out Novacap’s and a portion of Caisse de dépôt et placement du Québec’s (CDPQ) stake in the company. According to The Globe and Mail, General Atlantic holds a controlling stake in Plusgrade following the transaction.
A General Atlantic spokesperson declined to comment. BetaKit has reached out to Plusgrade for comment.
Plusgrade acquired fellow travel upgrade service UpStay in January 2023.
General Atlantic said in a statement it intends to partner with Plusgrade to support the company’s continued growth, which includes a focus on new business segments, go-to-market efforts, and merger and acquisition opportunities.
Founded in 2009, Plusgrade says it serves over 200 airline, hospitality, cruise, passenger rail, and financial services companies with its platform that creates new revenue streams through customer experiences. The Plusgrade platform helps firms upsell items in the travel industry, such as priority check-ins and boarding, pre-paid experiences, or even blocking neighboring seats on an airplane.
“With ancillary revenues and loyalty programs standing as some of the most important drivers of growth in the travel industry today, we believe Plusgrade is strongly positioned to continue capturing the market,” General Atlantic managing director Tanzeen Syed said in a statement. “We have strong conviction in Plusgrade’s vision and are excited to support the company in future value creation initiatives.”
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CDPQ invested $200 million in Plusgrade in 2018 to help the company execute its expansion plan, a transaction that valued the company at $600 million at the time. Novacap made its undisclosed investment in Plusgrade in September 2021, according to The Globe and Mail.
Plusgrade acquired loyalty commerce firm Points for $385 million in June 2022. Before being integrated into Plusgrade’s offerings, Points provided its platform for nearly 60 reward programs when it was acquired, including Air Canada, WestJet, and Hilton.
Plusgrade also received $5.2 million from Scale AI, one of Canada’s Global Innovation Clusters, in November 2022 for a project alongside Air Canada that would test the use of artificial intelligence in boosting passenger engagement and reducing perishable inventory for travel industry players.
UpStay, another travel upgrade service provider, was acquired by Plusgrade in January 2023. The acquisition added UpStay’s hundreds of hotels in 17 countries to Plusgrade’s portfolio.
General Atlantic says it has $83 billion in assets under management and 226 portfolio companies across its focus sectors, which it defines as climate, consumer, financial services, healthcare, life sciences, and technology sectors.
Feature image courtesy Unsplash via Yousef Alfuhigi.