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The rise of the gig economy helps London-based insurtech Zego to raise $42M
A couple of years ago, London-based startup Zego realised gig-economy workers would need insurance, and went on to raise a very healthy £6 million in Series A funding, led by Balderton Capital. Its first products were pay-as-you-go scooter and car insurance for food delivery workers.
It’s now announced a $42 million raise in one of the largest funding rounds for a European insurtech startup, in a Series B investment led by pan-European investment firm Target Global, specialists in the fintech and mobility space, with other backers including TransferWise founder Taavet Hinrikus. The proceeds will be used to for Zego’s expansion across Europe and to increase the workforce from 75 to 150.
The raise takes the firm to a total of $51 million in funding, with new investors Latitude joining existing backers Balderton Capital and Tom Stafford of DST Global. The investment comes as the company claims a whopping 900% growth over the past 12 months.
Zego caters to the new mobility services, such as ride-hailing, ridesharing, car rental and scooter sharing, and offers a range of policies from minute-by-minute insurance to annual cover, providing more flexibility than traditional insurers, with pricing based on usage data from vehicles.
This means it’s become popular with scooter and car delivery drivers, plus van and taxi fleets. The firm currently insures one-third of the U.K.’s food delivery market, largely through partnerships with Deliveroo, Just Eat and Uber Eats.
Sten Saar, CEO and co-founder of Zego, said: “When we built Zego from scratch three years ago, our mission was to transform the insurance sector by creating products which truly reflected the rapidly changing world of transport… The world is becoming more urbanized and because of this, we are moving from traditional ownership of vehicles to shared ‘usership’. This means that the rigid model of insurance that has existed for hundreds of years is no longer fit for purpose.”
Ben Kaminski, partner of lead investors Target Global, said: “With the growth of new mobility services, Zego identified a major gap in the insurance market and created a unique business model to fill it, which the incumbents will find very difficult to replicate. The potential of this company is almost limitless, and I fully expect to see its U.K. success mirrored across Europe and beyond in the coming years.”
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Flash, the stealthy e-scooter and ‘micro-mobility’ startup from Delivery Hero founder, raises €55M Series A
Flash, the stealthy mobility startup from Delivery Hero and Team Europe founder Lukasz Gadowski, is de-cloaking today, with news that the Berlin-based company has raised a whopping €55 million in Series A funding.
Despite rumours that multiple VC firms would be involved, the bulk of the new funding comes from Target Global via its mobility fund, which led this round and was already an existing backer of Flash. Others participating in Flash’s Series A include Idinvest Partners, Signals Venture Capital and a number of unnamed angel investors.
Notably, Gadowski is listed as an Entrepreneur in Residence at Target Global, and has been broadly working in the mobility space for the past two years. Rather quietly, he is also an investor in Grin, the Mexico City-based electric scooter company backed by Y Combinator.
In a call with Gadowski, he filled in many of the blanks relating to his new venture, including positioning Flash as a “micro-mobility” company that wants to solve the last-mile transportation problem. The startup is initially entering the e-scooter rental space, but this is just the beginning, he says. More broadly, the way he and his team think about Flash is that it is “unbundling” the car, with new forms of transport.
“In a few years time, micro-mobility will look very different from today,” says Gadowski, revealing that before founding Flash last year, he also took a hard look at new forms of aviation.
Even though it is still very early days for Flash, the startup already boasts a current team of more than 50 full-time employees, recruited from the likes of Uber, Amazon, and Airbnb. Alongside Gadowski, the other Flash co-founders are Carlos Bhola (Corp. Development) and Tim Rucquoi-Berger (Supply & Operations).
“This is not a scooter” – Flash branding in stealth mode
Notably — and definitely quietly — Flash is already operating in Switzerland and Portugal, with plans to launch into France, Italy and Spain in spring 2019, and in the rest of Europe in summer 2019.
The existing launches have been soft-launches, to say the least, with Flash e-scooters not initially carrying the company’s branding, instead sporting the label “This is not a scooter,” part in-house word play, part a statement of intent. Not just another scooter company might be an even more apt label if Gadowski’s longer-term ambitions are realised.
Perhaps more of a product-market-fit trial than anything else, Flash has initially used off-the-shelf e-scooters at launch, whilst simultaneously developing its own hardware and technology. The startup is headquartered in Berlin, but Gadowski tells me the team was first posted in China, establishing a supply chain and other partnerships that he believes can help give Flash the edge.
I put to him a common belief amongst some VCs that the e-scooter space in Europe is heading for a bloodbath that will continue to see a huge amount of venture capital pumped into the space, and subsequently many losers and a lot of money lost.
Recent raises by European e-scooter startups include Wind Mobility ($22 million), VOI ($50 million and Tier (€25 million). Meanwhile, Taxify has also announced its entrance into e-scooter rentals, and Bird and Lime have received substantial investment from three of Europe’s top venture capital firms. Index and Accel have backed Bird, and Atomico has backed Lime.
Gadowski appears for the most part unfazed by the swelling of competition coffers, although he does concede that the current “land grab” is forcing Flash to move slightly faster than it might have done otherwise. In some ways, he would have preferred to continue a more staggered, cautious roll-out, describing the startup as “product-first and multi-vehicle,” and says its customers are not just users of the service but local residents more broadly and the authorities with which it needs to coordinate. “Mistakes can be a lot more serious than at Delivery Hero, safety is involved,” he cautions.
The size of recent funding rounds in the space has also surprised him. However, he doesn’t think this is a “Facebook scenario,” where there will only be a single winner. Several micro-mobility companies can happily co-exist, he says, and the early movers are helping to pave the way for others, including Flash.
I suggest that the e-scooter land grab at its current pace also has a high chance of provoking a backlash amongst consumers and/or authorities, perhaps after a more serious safety accident or other source of reputational damage. Gadowski concedes this is definitely a “short-term” risk, but says there is so much determination by governments and local authorities to solve congestion and the last-mile problem, he doesn’t believe it will be a long-term one.
Finally, I asked Gadowski if he is considering acquiring smaller e-scooter startups in Europe (or perhaps elsewhere), as part of a roll-up strategy that would help the company leapfrog competitors. He declined to rule out acquisitions entirely — Delivery Hero was very effective in this regard — but said it doesn’t make much sense right now as hype in the space has pushed valuations way up. A more likely scenario, he says, is investing in or acquiring startups that can help with other aspects of the business, such as in the supply chain.
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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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