US: Luxury travel subscription brand Inspirato has announced the appointment of a new chief executive officer [CEO], a $10 million equity financing, and another round of layoffs, while also releasing its Q2 results.
As part of an investment agreement with private equity firm One Planet Group, the luxury vacation club has secured $10 million in equity financing – of which $4.6 million arrives with immediate effect and the remaining tranche of $5.4 million is expected to close next month. Upon the closing of the second tranche of funding, One Planet Group will have the option to invest a further $2.5 million in Inspirato.
As part of the transaction, Payam Zamani, founder and CEO of One Planet Group, will become the new CEO and chairman of Inspirato. As such, he will replace outgoing CEO Eric Grosse, who held the position for less than a year, and take over as chairman from co-founder Brad Handler.
One Planet Group will obtain 2.9 million new shares of Inspirato Class A common stock and roughly the same number of warrants. The purchase price for each warrant and share currently stands at $3.43.
In further personnel changes, the private equity firm will also bring two new unnamed individuals on to the Inspirato board.
Meanwhile, Inspirato will seek to cut costs of around $25 million on an annual basis, focusing specifically on cutting its workforce by 15 per cent and terminating underperforming leases.
It represents Inspirato’s third round of job cuts in a year and a half, having laid off 12 per cent of its staff in January 2023 in order to “streamline operations” and cut a further six per cent [50 team members] of its workforce six months later in July.
A month later, the luxury brand received $25 million in funding via a convertible note investment from Capital One Ventures – funding that was designed to provide “broad operating flexibility” to the struggling company.
Inspirato named former Expedia president Grosse as its CEO in October, succeeding previous incumbent and co-founder, Brent Handler.
In a statement, Zamani said: “This transaction not only strengthens Inspirato’s liquidity and improves the company’s capital structure with a large, supportive shareholder, but it injects our boardroom with a fresh perspective. I look forward to working with the team, meeting our members and taking Inspirato to new heights in a more sustainable and profitable manner.”
Last week, Inspirato was granted a conditional extension by Nasdaq’s hearings panel to continue its listing on the Nasdaq Stock Market, due to a “failure to maintain minimum market value” for public shares before July. The company now has until 22 November to meet the stock exchange’s minimum market value of publicly held shares requirement.
In the first quarter of the year, Inspirato reported a return to profitability, marking its first positive EBITDA and net income after three years. The company also generated $2.2 million in net income on $80.2 million in revenue, although that was a year-over-year drop of 12.4 per cent.
Announcing its Q2 earnings on Tuesday, the brand reported a 20 per cent year-over-year downturn in revenue to $67.4 million, while it now has 12,000 members and 12,700 active subscriptions, including 10,800 Inspirato Club subscriptions and 1,900 Inspirato Pass subscriptions.
Despite going public via a special purpose acquisition company [SPAC] merger with Thayer Ventures Acquisition Corporation in February 2022, and reaching an estimated high valuation of $1.1 billion, Inspirato has seen its share price plummet from a high of $1098.00 to $3.59 at the time of writing, mirroring other companies who merged with SPACs such as Selina, Vacasa and Sonder.
