Inspirato has entered into an investment agreement with One Planet Group that represents a number of changes at the company, including staff cuts and a new CEO.
As part of the agreement, the luxury travel subscription company received $10 million in equity financing from the private equity firm in exchange for around 2.9 million new shares of the company’s Class A Common Stock in addition to the same number of warrants. It also cut its workforce by 15% and named Payam Zamani as its new chairman and CEO.
David Kallery, president of 2011-founded Inspirato, said he is “incredibly excited” about what the new deal means for Inspirato.
“Over the last several quarters, we’ve worked tirelessly with our members top of mind to improve our product offerings and optimize our portfolio,” said Kallery.
He noted that the decision to reduce Inspirato’s workforce was “not easy” but said he is confident Inspirato will excel under Zamani’s leadership.
“Inspirato will continue to provide a world-class travel experience to its members for years to come,” said Kallery.
Once the deal is in closing stages, One Planet Group will also assign two new members to the Inspirato board of directors, in addition to Zamani’s appointment as chairman. Inspirato’s board is anticipated to stay at a count of seven directors.
“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,” said Zamani. “I look forward to working with the team, meeting our members and taking Inspirato to new heights in a more sustainable and profitable manner.”
Going forward, the company will focus on cost reduction with initiatives anticipated to cut costs by around $25 million on an annual basis. Those initiatives included the workforce reduction and the termination of leases that have not performed well.
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The first part of the deal will close Tuesday with consideration for around $4.6 million, the second part is expected to close in September with shareholder approval for consideration of around $5.4 million. Once those steps are complete, One Planet Group will be able to invest an additional $2.5 million should they choose “on the same terms.”
Tuesday’s news comes on the heels of the Nasdaq Hearings Panel’s conditional extension issued last week for Inspirato to remain listed on the Nasdaq Stock Market, according to an August 5 SEC filing. The decision arrived after the company participated in a Nasdaq panel hearing in July due to its “failure to maintain minimum market value” for public shares.
The Nasdaq panel opted to give the company an extension until November 22 to comply with the exchange’s listing rules, the SEC filing said.
Just over a year ago, Inspirato saw another cash infusion of $25 million from Capital One Ventures. A couple years prior, Thayer Ventures joined forces with Inspirato to merge and go public by special purpose. Following the IPO, Inspirato was estimated to be valued at $1.1 billion.
Inspirato released its second quarter earnings report Tuesday as well.
The company said operational efficiencies bolstered year-over-year improvements in gross margin, cost of revenue, adjusted EBITDA loss and negative free cash flow.
Adjusted EBITDA improved from a loss of $11.6 million in the second quarter of 2023 to a loss of $9.1 million in the same period this year. Inspirato’s revenue sat at $67.4 million in Q2 this year - down 20% year over year.
The second quarter closed with 12,000 members and 12,700 active subscriptions including 10,800 Inspirato Club subscriptions and 1,900 Inspirato Pass subscriptions.