Business Travel
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TravelPerk buys UK-based Click Travel in latest pandemic purchase
Business trip booking platform TravelPerk has bagged another rival — picking up UK-based Click Travel. Terms of the deal are not being disclosed but we’re told it’s the third — and largest — acquisition for TravelPerk to date.
The Barcelona-based startup has been on a bit of a shopping spree since the pandemic crisis hit Europe last year, picking up risk management startup Albatross in summer 2020 to bolster resilience to COVID-19’s impacts, before going on to acquire US-based NexTravel in January to expand its presence in the US market.
The latest acquisition deepens TravelPerk’s UK and European business, adding Click Travel’s 2,000+ SME clients (which includes the likes of Five Guys, Red Bull and Talk Talk) to its customer base — which will total just over 5,000 post-acquisition.
The UK company handles some £300M in business travel for its client base, which will bolster TravelPerk’s revenues going forward. The latter now bills itself as the “leading” travel management platform for the SME market globally and the UK as a whole.
“We are a global travel management platform but our core markets are the US and Europe and we expect both markets to be our primary growth areas this year,” said CEO and co-founder Avi Meir. “At the current moment, the US is our largest market due to the covid restrictions in the EU & UK.”
“Assuming travel restrictions won’t be imposed again, we expect to grow by 200% in 2022 with strong growth in our core markets in the US & EU,” he added.
Click Travel, which is based in Birmingham, was founded all the way back in 1999 — and appears to have raised relatively little venture capital over the years, per Crunchbase. However, in 2018, the veteran player participated in the government-backed Future Fifty scale-up program — and also took in a “multi-million pound” investment from the UK-based Business Growth Fund.
Whether there will be any domestic hang-wringing over a high growth UK business being sold to a European rival remains to be seen.
In a statement on its sale to TravelPerk, CEO James McLean omitted to mention the pandemic’s impact on the travel sector — choosing instead to highlight what he couched as the pair’s shared “mission” to reduce the cost and complexity of business travel.
“Those shared objectives, combined with the natural cultural fit between our two companies, means we are incredibly excited to bring our teams together. Combining TravelPerk’s industry-leading knowledge, technology, experience and first class customer support with our own is a powerful proposition and we can’t wait to get started,” McLean added.
While Click Travel has focused on serving the UK market, TravelPerk has had a global focus from the start.
It has also attracted a large amount of external investment (totalling just under $300M) over its shorter run (founded in 2015).
Back in April, for example, it raised a $160M Series D round. It had also topped up its Series C round in July 2019 before the pandemic hit. So TravelPerk hasn’t been short of funds to ride out the COVID-19 revenue crunch — and as well as shopping for competitors it has also been able to avoid making any layoffs over the travel crisis.
Per a press release, capital to fund the Click Travel acquisition was provided by Boston-based investment manager, The Baupost Group.
TravelPerk’s Meir remains bullish about the near-term prospects for growth in the business travel sector, despite ongoing concerns in Europe and the US about the more infectious ‘Delta’ variant of the virus which is contributing to surging rates of COVID-19 in some markets (including the UK) — claiming it’s already seeing green shoots of recovery in “key markets”.
“TravelPerk is outgrowing the market pace and is already at above 2019 revenue figures,” Meir told TechCrunch. “When it comes to the rest of the industry, the recovery of travel is well underway but moving at different speeds in different markets. For instance in the US, according to TSA Checkpoint figures, at the current rate of recovery the US travel market is expected to reach pre-pandemic volume at the end of August 2021.
“We anticipate the global market may take a little longer but are optimistic we will see close to pre-pandemic levels in 2022.”
“We’re one of the few players in the travel industry that continued scaling and growing since the beginning of the pandemic with a strategy that didn’t involve any layoffs,” he also told us. “Since March last year, our strategy has been not to sit back but to be aggressive and invest massively in our product offering and in our global reach, so that we are in the best position possible to capitalise when travel makes its full recovery. Today’s news is a major part of that plan.
“We will aim to continue being aggressive in our growth strategy and we are open to more acquisitions if they make strategic sense and are aligned with our vision and culture.”
Per Meir, Click Travel and TravelPerk will initially continue to run as two independent platforms but he confirmed that an “eventual full integration” is planned — with both set to operate under the TravelPerk brand in time.
The startup also says it will retain all Click Travel’s staff — denying it has plans to axe any jobs. It also intends to hold onto the company’s Birmingham base — having the city as another UK hub for its business (in addition to its existing London office).
“The 150 amazing people working for Click Travel were a big reason why we wanted to acquire the company, and were priced into the deal,” said Meir. “We have no plans of redundancies. We rather aim to integrate the entire team into the TravelPerk Group.”
Asked if TravelPerk might consider expanding its focus to also target the enterprise segment, he noted that it’s seen interest from larger businesses — and said he’s “open” to the idea — but for now Meir said TravelPerk remains fully focused on the SME market: “where we think there is the biggest need, and the biggest growth potential”.
“That’s why this acquisition is so exciting for us; it makes us undoubtedly the leading travel management platform for SMEs globally,” he added.
Flexibility and sustainability
Discussing how the pandemic has changed business travel, Meir highlighted two “important trends” he said TravelPerk will continue to invest it: Namely flexibility for bookings; and sustainability so environmental impact can be reduced.
TravelPerk plans to invest more than $100M in two key products in these areas (aka: FlexiPerk and GreenPerk), per Meir.
“We’ve noticed on our platform that travellers are booking closer to their departure date: Before the pandemic, trip searches were usually conducted between 7 and 30 days prior to the selected departure date,” he said, elaborating on the importance of flexibility for the sector. “Now we are seeing most trip searches are for trips less than 6 days away. Flexibility is therefore one of the most in-demand perks in business travel. Travellers will rely on flexible fares to give them the peace of mind that they won’t lose money if they need to change or cancel a trip on short notice.”
On sustainability, Meir said businesses are already looking for ways to reduce their carbon footprint and general environmental impact, while consumers are also wanting to make conscientious decisions to reduce carbon emission — suggesting that train-based travel is set to gain ground (vs flights) as a result. (That might, ultimately, require some creative retooling of TravelPerk’s logo — which prominently features an airplane icon… )
“We expect to see significant interest in our carbon offsetting product, GreenPerk, as a result but we also expect to see changes in how people are choosing to travel,” he said.
“For instance, rail is undoubtedly the more environmentally-friendly travel option. In fact, taking a train over a domestic flight can reduce an individual’s carbon emissions by about 84%. We have been building out our rail inventory for a number of years now and we expect train travel to be an increasingly popular business travel option for customers this year and next.”
As for the changing mix of business-related travel in a pandemic-reconfigured world of remote work, Meir continues to argue that more businesses providing employees with remote working options will sum to more business travel overall.
“This might be bad news for the daily commute but it will result in more business travel,” he suggested. “Whether they are going fully remote and ‘working from anywhere’, or operating on a hybrid model, distributed teams will need (and want) to come together. We believe there will be a new type of business trip — one where team members will travel from different working hubs to get together for teambuilding and brainstorming sessions, for meetings with clients and colleagues, and even for ‘bleisure’ (business and leisure) trips.”
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TripActions lays off hundreds amid COVID-19 travel freeze
The coronavirus demand crunch has taken another bite: Palo Alto-based corporate travel-focused unicorn TripActions has confirmed laying off hundreds of staff.
Per this post on Blind — written by someone with a verified TripActions email address — the company laid off 350 people. Business Insider reported the same figure yesterday, and the Wall Street Journal said the layoffs amount to between one-quarter to one-fifth of the startup’s total staff, citing a person familiar with the situation.
Update: A spokesman for TripActions told us the number of impacted employees impacted is “less than 300” — although he qualified the remark by saying the figure includes 25 people who were offered other roles within the company.
In an earlier email to Crunchbase News TripActions confirmed axing jobs in response to the COVID-19 global health crisis — saying it had “cut back on all non-essential spend.” It did not confirm exactly how many employees it had fired at that point.
“[We] made the very difficult decision to reduce our global workforce in line with the current climate,” TripActions wrote in the statement. “We look forward to when the strength of the global economy and business travel inevitably return and we can hire back our colleagues to rejoin us in our mission to make business travel effortless for our customers and users.”
“This global health crisis is unlike anything we’ve ever seen in our lifetimes, and our hearts go out to everyone impacted around the world, including our own customers, partners, suppliers and employees,” it added. “The coronavirus has had [a] wide-reaching effect on the global economy. Every business has been impacted including TripActions. While we were fortunate to have recently raised funding and secured debt financing, we are taking appropriate steps in our business to ensure we are here for our customers and their travelers long into the future.”
Per the post on Blind, TripActions is providing one week of severance to sacked staff and medical cover until end of month. “With [the coronavirus pandemic] going on you think they would do better,” the OP wrote. The layoffs were made by Zoom call, they also said.
However TripActions’ spokesman disputed the details about severance and medical cover, saying it is offering severance packages for U.S. employees that include two months of company-paid COBRA health insurance coverage, extending health benefits through the end of June, along with a minimum of 3 weeks salary.
He added that U.S. employees who were given notice yesterday were told their last day would be April 1, 2020 — meaning their health benefits continue through the end of April.
Travel startups are facing an unprecedented nuclear winter as demand has fallen off a cliff globally — with little prospect of a substantial change to the freeze on most business travel in the coming months as rates of COVID-19 infections continue to grow exponentially outside China.
However, TripActions is one of the highest valued and best financed of such startups, securing a $500 million credit facility for a new corporate product only last month. At the time, Crunchbase recorded $480 million in tracked equity funding for the company, including a $250M Series D TripActions raised in June from investors including a16z, Group 11, Lightspeed and Zeev Ventures.
Before the layoffs, the company had already paused all hiring, per one former technical sourcer for the company writing on LinkedIn.
This post was updated with additional comment from TripActions
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Lola.com raises $37M to take on SAP and others in the world of business travel
Business customers continue to be a huge target for the travel industry, and today a startup has raised a tidy sum to help it double down on the $1.7 trillion opportunity. Lola.com — a platform for business users to book and manage trips — has raised $37 million to continue building out its technology and hire more talent as it takes on incumbents like SAP targeting the corporate sector.
The Series C is led by General Catalyst and Accel, with participation from CRV, Tenaya Capital and GV. All are previous investors. We are asking about the valuation but it looks like prior to this, the company had raised just under $65 million, and its last post-money valuation, in 2017, was $100 million, according to PitchBook.
“We’re happy with our valuation and think it provides a good balance between recognizing our progress growing the business and protecting employees equity by keeping a reasonable valuation,” said Mike Volpe, who took over last year as CEO, in an email to us. “We prioritize our team over everything else and we’re not going to raise too much money at overly high valuations that make it hard for employees to make money on their equity.”
There are signs that the valuation will have had a bump in this round. The company said in 2018, its bookings have gone up by 423 percent, with revenues up 786 percent, although it’s not disclosing what the actual figures are for either.
“As business travelers have become increasingly mobile, Lola.com’s mission is to completely transform the landscape of corporate travel management,” said Volpe. “The continued support of our investors underscores the market potential, which is leading us to expand our partner ecosystem and double our headcount across engineering, sales and marketing. At the core, we continue to invest in building the best, simplest corporate travel management platform in the industry.”
Co-founded by Paul English and Bill O’Donnell — respectively, the former CTO/co-founder and chief architect of the wildly successful consumer travel booking platform Kayak — Lola originally tried to fix the very thing that Kayak and others like it had disrupted: it was designed as a platform for people to connect to live agents to help them organise their travel. That larger cruise ship might have already said, however (so to speak), and so the company later made a pivot to cater to a more specific demographic in the market that often needs and expects the human touch when arranging logistics: the business user.
Its unique selling point has not been just to provide a pain-free “agile” platform to make bookings, but for the platform’s human agents to be proactively pinging business users when there are modifications to a booking (for example because of flight delays), and offering help when needed to sort out the many aspects of modern travel that can be painful and time consuming for busy working people, such as technical issues around a frequent flyer program.
Lola.com is not the only one to spot the opportunity there. To further diversify its business and to move into higher-margin, bigger-ticket offerings, Airbnb has also been slowly building out its own travel platform targeting business customers by adding in hotels and room bookings.
There are others that are either hoping to bypass or complement existing services with their own takes on how to improve business travel such as TravelPerk (most recent raise: $44 million), Travelstop (an Asia-focused spin), and TripActions (most recently valued at $1 billion), to name a few. That speaks to an increasingly crowded market of players that are competing against incumbents like SAP, which owns Concur, Hipmunk and a plethora of other older services.
Lola.com has made some interesting headway in its own approach to the market, by partnering with one of the names most synonymous with corporate spending, American Express, and specifically a JV it is involved in called American Express Global Business Travel.
“Lola.com offers an incredibly simple solution to corporate travel management, which enables American Express Global Business Travel to take our value proposition to even more companies across the middle market,” said Evan Konwiser, VP of Product Strategy and Marketing for American Express GBT, in a statement.
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Blueground raises $20 million for flexible apartment rentals
Blueground, the startup providing turnkey flexible rental apartments, has raised $20 million in a round led by Athens-based VentureFriends, with participation from Endeavor Catalyst, Dubai’s Jabbar Internet Group and serial entrepreneur Kevin Ryan. Ryan — who helped found MongoDB, Gilt Groupe, Zola and others — will also join Blueground’s board of directors.
It’s no secret that remote work and frequent business travel are becoming more and more commonplace. As a result, a growing number of people are shying away from lengthy rental or lease commitments and are instead turning to companies like Blueground for more flexible short-term solutions.
Blueground is trying to be the go-to option for individuals moving or traveling to a city for as little as a month, or any duration longer. Similar to flexible office space providers, Blueground partners with major property owners to sign long-term leases for units it then furnishes and rents out with more flexible terms.
Users can rent listings for anywhere between one month to five years, and rates are set on a monthly basis, which can often lead to more favorable prices over medium-to-long-term stays relative to the short-term pricing structures commonly used by hospitality companies.
Filling hospitality gaps and easing rental friction
CEO Alex Chatzieleftheriou is intimately familiar with the value flexible leasing can unlock. Before founding Blueground, Chatzieleftheriou worked as a consultant for McKinsey, where he was frequently sent off to projects in far-off cities for months at a time — living in 15 cities over just seven years.
However, no matter how much time Alex logged in hotels, he constantly felt the frustration and mental strain of not having a stable personal living arrangement.
“I spent so much time in hotels but they never really resembled a home. They didn’t have enough space or enough privacy,” Chatzieleftheriou told TechCrunch. “But renting an apartment can be a huge pain in these cities. They can be hard to find, they usually have a minimum rental term of a year or more, and you usually have to deal with filling out paperwork and buying furniture.”
Knowing there were thousands of people at his company alone dealing with the same frustrations, Alex launched what would become Blueground, beginning with a handful of apartments in his home city of Athens, Greece.
Chatzieleftheriou and his team structured the platform to make the rental process as seamless as possible for the needs of flexible renters like himself. Through a quick plug-and-play checkout flow — more similar to the booking process for a hotel or Airbnb — renters can lock down an apartment without having to deal with the painful, costly and time-consuming traditional rental process. Tenants are also able to switch to any other Blueground listing during their rental period if their preferences change or if they want to explore different locations during their stay.
Every Blueground listing also comes completely furnished by the company’s design team, so renters don’t have to deal with buying, transporting — and eventually selling — furniture. And each apartment comes outfitted with digital and connected infrastructure so that tenants can monitor their apartment and arrange maintenance, housekeeping and other services directly through Blueground’s mobile app.
The value proposition is also fairly straightforward for the landlords Blueground partners with, as they avoid costs related to marketing and coordinating with fragmented brokers to fill open units, while also benefiting from steady rental payments, tenant vetting and free property management.
The offering certainly seems to be compelling for renters — while Chatzieleftheriou initially focused on serving business travelers and those moving for work, he quickly realized the market for flexible leasing was in fact much bigger. Blueground’s sales have tripled over the past three years and after its expansion in the U.S. last year, Blueground now hosts 1,700 listings in 10 cities across three continents.
“The trend of flexible and seamless real estate is bigger and is happening everywhere,” Chatzieleftheriou said. “A lot of people throughout the real estate sector really want this seamless, turnkey, furnished solution.”
To date, Blueground has raised a total of $28 million and plans to use funds from the latest round for additional hiring and to help the company reach its goal of growing its portfolio to 50,000 units over the next five years.
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TravelPerk grabs $44M to take its pain-free SaaS for business travel global
Only six months ago Barcelona-based TravelPerk bagged a $21 million Series B, off the back of strong momentum for a software as a service platform designed to take a Slack-like chunk out of the administrative tedium of arranging and expensing work trips.
Today the founders’ smiles are firmly back in place: TravelPerk has announced a $44 million Series C to keep stoking growth that’s seen it grow from around 20 customers two years ago to approaching 1,500 now. The business itself was only founded at the start of 2015.
Investors in the new round include Sweden’s Kinnevik, Russian billionaire and DST Global founder Yuri Milner and Tom Stafford, also of DST. Prior investors include the likes of Target Global, Felix Capital, Spark Capital, Sunstone, LocalGlobe and Amplo.
Commenting on the Series C in a statement, Kinnevik’s Chris Bischoff, said: “We are excited to invest in TravelPerk, a company that fits perfectly into our investment thesis of using technology to offer customers more and much better choice. Booking corporate travel is unnecessarily time-consuming, expensive and burdensome compared to leisure travel. Avi and team have capitalised on this opportunity to build the leading European challenger by focusing on a product-led solution, and we look forward to supporting their future growth.”
TravelPerk’s total funding to date now stands at almost $75 million. It’s not disclosing the valuation that its latest clutch of investors are stamping on its business but, with a bit of a chuckle, co-founder and CEO Avi Meir dubs it “very high.”
Gunning for growth — to West and East
TravelPerk contends that a $1.3 trillion market is ripe for disruption because legacy business travel booking platforms are both lacking in options and roundly hated for being slow and horrible to use. (Hi Concur!)
Helping business save time and money using a slick, consumer-style trip booking platform that both packs in options and makes business travelers feel good about the booking process (i.e. rather than valueless cogs in a soul-destroying corporate ROI machine) is the general idea — an idea that’s seemingly catching on fast.
And not just with the usual suspect, early adopter, startup dog food gobblers but pushing into the smaller end of the enterprise market too.
“We kind of stumbled on the realization that our platform works for bigger companies than we thought initially,” says Meir. “So the users used to be small, fast-growing tech companies, like GetYourGuide, Outfittery, TypeForm etc… They’re early adopters, they’re tech companies, they have no fear of trying out tech — even for such a mission-critical aspect of their business… But then we got pulled into bigger companies. We recently signed FarFetch for example.”
Other smaller-sized enterprises that have signed up include the likes of Adyen, B&W, Uber and Aesop.
Companies small and big are, seemingly, united in their hatred of legacy travel booking platforms — and feeling encouraged to check out TravelPerk’s alternative, thanks to the SaaS being free to use and free from the usual contract lock ins.
TravelPerk’s freemium business model is based on taking affiliate commissions on bookings. Down the road, it also has its eye on generating a data-based revenue stream via paid-tier trip analytics.
Currently it reports booking revenues growing at 700 percent year on year. And Meir previously told us it’s on course to do $100 million GMV this year — which he confirms continues to be the case.
It also says it’s on track to complete bookings for one million travelers by next year. And it claims to be the fastest growing software as a service company in Europe, a region which remains its core market focus — though the new funding will be put toward market expansion.
And there is at least the possibility, according to Meir, that TravelPerk could actively expand outside Europe within the next 12 months.
“We definitely are looking at expansion outside of Europe as well. I don’t know yet if it’s going to be first U.S. — West or East — because there are opportunities in both directions,” he tells TechCrunch. “And we have customers; one of our largest customers is in Singapore. And we do have a growing amount of customers out of the U.S.”
Doubling down on growth within Europe is certainly on the slate, though, with a chunk of the Series C going to establish a number of new offices across the region.
Having more local bases to better serve customers is the idea. Meir notes that, perhaps unusually for a startup, TravelPerk has not outsourced customer support — but kept customer service in-house to try to maintain quality. (Which, in Europe, means having staff who can speak the local language.)
He also quips about the need for a travel business to serve up “human intelligence” — i.e. by using tech tools to slickly connect on-the-road customers with actual people who can quickly and smartly grapple with and solve problems, versus an automated AI response which is — let’s face it — probably the last thing any time-strapped business traveler wants when trying to get orientated fast and/or solve a snafu away from home.
“I wouldn’t use [human intelligence] for everything but definitely if people are on the road, and they need assistance, and they need to make changes, and you need to understand what they said…” argues Meir, going on to say ‘HI’ has been his response when investors asked why TravelPerk’s pitch deck doesn’t include the almost-impossible-to-avoid tech buzzword: “AI.”
“I think we are probably the only startup in the world right now that doesn’t have AI in the pitch deck somewhere,” he adds. “One of the investors asked about it and I said ‘well we have HI; it’s better’… We have human intelligence. Just people, and they’re smart.”
Also on the cards (it therefore follows): More hiring (the team is at ~150 now and Meir says he expects it to push close to 300 within 18 months), as well as continued investment on the product front, including in the mobile app, which was a late addition, only arriving this year.
The TravelPerk mobile app offers handy stuff like a one-stop travel itinerary, flight updates and a chat channel for support. But the desktop web app and core platform were the team’s first focus, with Meir arguing the desktop platform is the natural place for businesses to book trips.
This makes its mobile app more a companion piece — to “how you travel” — housing helpful additions for business travelers, as nice-to-have extras. “That’s what our app does really well,” he adds. “So we’re unusually contrarian and didn’t have a mobile app until this year… It was a pretty crazy bet but we really wanted to have a great web app experience.”
Much of TravelPerk’s early energy has clearly gone into delivering on the core product via nailing down the necessary partnerships and integrations to be able to offer such a large inventory — and thus deliver expanded utility versus legacy rivals.
As well as offering a clean-looking, consumer-style interface intended to do for business travel booking feels what Slack has done for work chat, the platform boasts a larger inventory than traditional players in the space, according to Meir — by plugging into major consumer providers such as Booking.com and Expedia.
The inventory also includes Airbnb accommodation (not just traditional hotels), while other partners on the flight side include Kayak and Skyscanner.
“We have not the largest bookable inventory in the world,” he claims. “We’re way larger than old-school competitors… We went through this licensing process which is almost as difficult as getting a banking license… which gives us the right to sell you the same product as travel agencies… Nobody in the world can sell you Kayak’s flights directly from their platform — so we have a way to do that.”
TravelPerk also recently plugged trains into its directly bookable options. This mode of transport is an important component of the European business travel market, where rail infrastructure is dense, highly developed and often very high-speed. (Which means it can be both the most convenient and environmentally friendly travel option to use.)
“Trains are pretty complex technically so we found a great partner,” notes Meir on that, listing major train companies including in Germany, Spain and Italy as among those it’s now able to offer direct bookings for via its platform.
On the product side, the team is also working on integrating travel and expenses management into the platform — to serve its growing numbers of (small) enterprise customers who need more than just a slick trip booking tool.
Meir says getting pulled to these bigger accounts is steering its European expansion — with part of the Series C going to fund a clutch of new offices around the region near where some of its bigger customers are based. Beginning in London, with Berlin, Amsterdam and Paris slated to follow soon.
Picking investors for the long haul
What does the team attribute TravelPerk’s momentum to generally? It comes back to the pain, says Meir. Business travelers are being forced to “tolerate” horrible legacy systems. “So I think the pain-point is so visible and so clear [it sells itself],” he argues, also pointing out this is true for investors (which can’t have hurt TravelPerk’s funding pitch).
“In general we just built a great product and a great service, and we focused on this consumer angle — which is something that really connects well with what people want in this day and age,” he adds. “People want to use something that feels like Slack.”
For the Series C, Meir says TravelPerk was looking for investors who would be comfortable supporting the business for the long haul, rather than pushing for a quick sale. So they are now articulating the possibility of a future IPO.
And while he says TravelPerk hadn’t known much about Swedish investment firm Kinnevik prior to the Series C, Meir says he came away impressed with its focus on “global growth and ambition,” and the “deep pockets and the patience that comes with it.”
“We really aligned on this should be a global play, rather than a European play,” he adds. “We really connected on this should be a very, big independent business that goes to the path of IPO rather than a quick exit to one of the big players.
“So with them we buy patience, and also the condition, when offers do come onto the table, to say no to them.”
Given it’s been just a short six months between the Series B and C, is TravelPerk planning to raise again in the next 12 months?
“We’re never fundraising and we’re always fundraising I guess,” Meir responds on that. “We don’t need to fundraise for the next three years or so, so it will not come out of need, hopefully, unless something really unusual is happening, but it will come more out of opportunity and if it presented a way to grow even faster.
“I think the key here is how fast we grow. And how good a product we certify — and if we have an opportunity to make it even faster or better than we’ll go for it. But it’s not something that we’re actively doing it… So to all investors reading this piece don’t call me!” he adds, most likely inviting a tsunami of fresh investor pitches.
Discussing the challenges of building a business that’s so fast growing it’s also changing incredibly rapidly, Meir says nothing is how he imagined it would be — including fondly thinking it would be easier the bigger and better resourced the business got. But he says there’s an upside too.
“The challenges are just much, much bigger on this scale,” he says. “Numbers are bigger, you have more people around the table… I would say it’s very, very difficult and challenging but also extremely fun.
“So now when we release a feature it goes immediately into the hands of hundreds of thousands of travelers that use it every month. And when you fundraise… it’s much more fun because you have more leverage.
“It’s also fun because — and I don’t want to position myself as the cynical guy — the reality is that most startups don’t cure cancer, right. So we’re not saving the world… but in our little niche of business travel, which is still like $1.3 trillion per year, we are definitely making a dent.
“So, yes, it’s more challenging and difficult as you grow, and the problems become much bigger, but you can also deliver the feedback to more people.”
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TravelPerk grabs $21M to make booking business trips suck less
TravelPerk, a Barcelona-based SaaS startup that’s built an end-to-end business travel platform, has closed a $21 million Series B round, led by Berlin-based Target Global and London’s Felix Capital. Earlier investors Spark Capital and Sunstone also participated in the round, alongside new investor Amplo.
When we last spoke to the startup back in June 2016 — as it was announcing a $7M Series A — it had just 20 customers. It’s now boasting more than 1,000, name-checking “high growth” companies such as Typeform, TransferWise, Outfittery, GetYourGuide, GoCardless, Hotjar, and CityJet among its clients, and touting revenue growth of 1,200% year-on-year.
Co-founder and CEO Avi Meir tells us the startup is “on pace” to generate $100M in GMV this year.
Meir’s founding idea, back in 2015, was to create a rewards program based around dynamic budgeting for business trips. But after conversations with potential customers about their pain-points, the team quickly pivoted to target a broader bundle of business travel booking problems.
The mission now can be summarized as trying to make the entire business travel journey suck less — from booking flights and hotels; to admin tools for managing policies; analytics; customer support; all conducted within what’s billed as a “consumer-like experience” to keep end-users happy. Essentially it’s offering end-to-end travel management for its target business users.
“Travel and finance managers were frustrated by how they currently manage travel and looked for an all in one tool that JUST WORKS without having to compare rates with Skyscanner, be redirected to different websites, write 20 emails back and forth with a travel agent to coordinate a simple trip for someone, and suffer bad user experience,” says Meir.
“We understood that in order to fix business travel there is no way around but diving into it head on and create the world’s best OTA (online travel agency), combined with the best in class admin tools needed in order to manage the travel program and a consumer grade, smart user experience that travelers will love. So we became a full blown platform competing head on with the big TMCs (travel management companies) and the legacy corporate tools (Amex GBT, Concur, Egencia…) .”
He claims TravelPerk’s one-stop business trip shop now has the world’s largest bookable inventory (“all the travel agent inventory but also booking.com, Expedia, Skyscanner, Airbnb… practically any flight/hotel on the internet — only we have that”).
Target users at this stage are SMEs (up to 1,500 employees), with tech and consulting currently its strongest verticals, though Meir says it “really runs the gamut”. While the current focus is Europe, with its leading markets being the UK, Germany and Spain.
TravelPerk’s business model is freemium — and its pitch is it can save customers more than a fifth in annual business travel costs vs legacy corporate tools/travel agents thanks to the lack of commissions, free customer support etc.
But it also offers a premium tier with additional flexibility and perks — such as corporate hotel rates and a travel agent service for group bookings — for those customers who do want to pay to upgrade the experience.
On the competition front the main rivals are “old corporate travel agencies and TMC”, according to Meir, along with larger players such as Egencia (by Expedia) and Concur (SAP company).
“There are a few startups doing what we are doing in the U.S. like TripActions, NexTravel, as well as some smaller ones that are popping up but are in an earlier stage,” he notes.
“Since our first round… TravelPerk has been experiencing some incredible growth compared to any tech benchmark I know,” he adds. “We’ve found a stronger product market fit than we imagined and grew much faster than planned. It seems like everyone is unhappy with the way they are currently booking and managing business travel. Which makes this a $1.25 trillion market, ready for disruption.”
The Series B will be put towards scaling “fast”, with Meir arguing that TravelPerk has landed upon a “rare opportunity” to drive the market.
“Organic growth has been extremely fast and we have an immediate opportunity to scale the business fast, doing what we are doing right now at a bigger scale,” he says.
Commenting in a statement, Antoine Nussenbaum, partner at Felix Capital, also spies a major opportunity. “The corporate travel industry is one of the largest global markets yet to be disrupted online. At Felix Capital we have a high conviction about a new era of consumerization of enterprise software,” he says.
While Target Global general partner Shmuel Chafets describes TravelPerk as “very well positioned to be a market leader in the business travel space with a product that makes business travel as seamless and easy as personal travel”.
“We’re excited to support such an experienced and dedicated team that has a strong track record in the travel space,” he adds in a supporting statement. “TravelPerk is our first investment in Barcelona. We believe in a pan-European startup ecosystem and we look forward to seeing more opportunities in this emerging startup hub.”
Flush with fresh funding, the team’s next task is even more recruitment. “We’ll grow our teams all around with emphasis on engineering, operations and customer support. We’re also planning to expand, opening local offices in 4-5 new countries within the upcoming year and a half,” says Meir.
He notes the company has grown from 20 to 100 employees over the past 12 months already but adds that it will continue “hiring aggressively”.
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