Wanderlust- and experiential-inspired hotel brand Selina launched its IPO on Thursday after recently closing its merger with special purpose acquisition company BOA Acquisition Corp. The fast-growing, London-based brand with approximately 43,000 beds across 163 open and secured properties in 25 countries and six continents, has a market cap between US$1 billion and US$1.2 billion, according to Rafael Museri, co-founder and CEO of Selina.
The Business Combination was approved by BOA stockholders at a special meeting held on October 21. Samba Merger Sub, Inc., a subsidiary of Selina, merged with and into BOA, with BOA surviving the merger and, as a result of that merger, BOA became a direct, wholly-owned subsidiary of Selina, with the securityholders of BOA becoming securityholders of Selina. Selina’s ordinary shares and public warrants will begin trading on the Nasdaq under the ticker symbol “SLNA” and “SLNAW,” respectively.
In addition to potential cash proceeds from BOAS’ cash in trust, the business combination is expected to provide Selina with US$54 million of capital via its private placement financing, and US$118 million from subscriptions to the US$147.5 million principal amount of 6% senior unsecured convertible notes due 2026 announced on April 25, 2022 – each to fund Selina’s operations and continue its plans to achieve profitability.
Selina, which drives growth primarily by converting underperforming hotels and creates unique spaces with coworking, recreation, wellness and local experiences, delivered US$86 million in revenue during the first half of 2022, up 142% year-over-year. It also improved occupancy by 60% to 45.5% and expects to be EBITDA positive in 2023 and generate approximately US$823 million in revenue by 2024. Growth will be driven by new openings, operational improvements, and the maturation of its portfolio.
The combined company will continue to be led by Museri alongside the rest of the current Selina management team. Selina’s Board of Directors comprises seven directors, including Museri and Daniel Rudasevski, co-founder and chief growth officer of Selina.
While hospitality-focused SPAC launches have struggled this year, Museri is not dissuaded. “There are 2.4 billion millennials and Gen Z out there seeking interesting physical spaces to socialize and build experiences,” he told HOTELS on Wednesday in an exclusive trade interview. “Big picture we are building a platform that can grow in endless numbers of beautiful villages, towns and cities around the world that will be extremely happy to get a Selina in their neighborhood or in their community. There are thousands of opportunities and, for me, the platform is there. We have improved dramatically the balance sheet of the company.
Museri said the Selina team has dramatically improved the balance sheet and proved to itself that consumer like and consume the product. So, whether the timing for IPO is good or not, Selina has a growth model and “if you’re a good company, you’re a good company,” he said. “We’re going to overdeliver, be humble and keep doing what we’re doing. And the market will appreciate it.”
Museri added that its advantage over other lifestyle brands is Selina’s ability to truly tailor and adjust unique user content to the location. “The other side that you need is operational excellence, and I don’t think we are quite there yet,” he said. “A year ago we hired a COO that ran a company with more than US$1 billion in revenue and US$150 million in EBITDA, which is three times bigger than us. We gave this person so much power and authority because it is now time for us to become operationally excellent… We’re coming in a very humble way to these processes and the focus in 2023 In 2024 will be definitely about operational metrics.”
Looking further ahead, in addition to growing its music event business and building out a membership model, Selina is also starting to tap into more corporate business demand. It is doing more outreach in the B2B and B2C communities and is about to announce a partnership with Israeli-based corporate retreat producer Mantra to bring more of this business to Selina hotels. “I really believe that the future of hospitality is content and experiences because people need to come to you for other reasons,” Museri said. “You can’t compete with the room and a better bed. People are going to stay in a specific hotel in the next 50 years for other reasons. I want to build the best platform for those two generations that deliver the other reasons.”