Amid Rancor and Lawsuits, Online Tour Operators Merge

It’s not every day an older and better-funded tech startup gets swallowed by a younger competitor. That’s what happened this month when online travel company Peek cut a deal to take on the technology, customers and some employees of rival Zozi.

The story of how the two companies became one has all the hallmarks of a Silicon Valley drama: executive-board conflicts, allegations of inflated financial metrics, and lawsuits involving the heirs to a multibillion-dollar hotel empire.

Zozi, founded in 2008, ran a website where travelers could book activities ranging from hiking trips in the Andes to craft beer tastings in Santa Barbara. It also sold software to tour operators to help them manage bookings. It raised around $60 million in cash and debt financing. Peek, which runs a very similar business, has raised $16.9 million since serial entrepreneur Ruzwana Bashir founded it in 2012. Now, Peek is the only one still in the tour business. The terms of Peek's deal to acquire Zozi's assets in April weren't disclosed, but two people familiar with the matter say the price was a fraction of the $125 million valuation the company had touted in the past. A pair of dueling lawsuits helps explain why the number is so much lower than the company's valuation.