Leisureplanet Taps Corporate, Euro VC

In two deals that likely will carry the company to an initial public offering, Leisureplanet raised $40 million last month from Europ@Web, the Internet investment arm of the Arnault Group and CNN News Group.

Closed separately, the two investments will be used to accomplish similar goals. Clive Kabatznik, chief executive of Leisureplanet, said the company would use 60% of the investment from Europ@Web to begin a marketing program, which will particularly emphasize advertising, and for product development to assist the expansion of the company’s service offering.

“We are a full service online travel service, and our focus is to have a leisure-oriented brand,” Kabatznik said.

He said the firm focuses on the individual traveler and offers a strong content component. Leisureplanet also has partnerships with Yahoo! and Lycos in Europe and an exclusive to InfoSpace in the U.S. and Canada.

The second deal, which closed later in the month, saw CNN commit the $20 million in a transaction that included an agreement whereby Leisureplanet will become the exclusive travel services provider for most CNN Web sites.

Additional terms of the agreement call for integration of co-branded content to be integrated in CNN.com, CNNfn.com, CNNSI.com, CNNenEspanol.com, CNNemPortugues.com and CNNTraveller.com. Leisureplanet will also provide users that book travel over CNN with multilingual customer care and Leisureplanet will launch a three-year, $30 million advertising campaign across CNN’s online and on-air properties.

At the time of the Europ@Web financing, Kabatznik said the company’s parent company, Leisureplanet Holdings Ltd., would exercise its right to invest $10 million. This new capital is expected to bring the company to an initial public offering, with no further private equity deals.

“With that matching and these funds, we should be able to get to an IPO, and we are seeing things that could have that happen sooner rather than later,” Kabatznik said.