travel industry
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YouTravel.Me packs up $1M to match travelers with curated small group adventures
YouTravel.Me is the latest startup to grab some venture capital dollars as the travel industry gets back on its feet amid the global pandemic.
Over the past month, we’ve seen companies like Thatch raise $3 million for its platform aimed at travel creators, travel tech company Hopper bring in $175 million, Wheel the World grab $2 million for its disability-friendly vacation planner, Elude raise $2.1 million to bring spontaneous travel back to a hard-hit industry and Wanderlog bag $1.5 million for its free travel itinerary platform.
Today YouTravel.Me joins them after raising $1 million to continue developing its online platform designed for matching like-minded travelers to small-group adventures organized by travel experts. Starta VC led the round and was joined by Liqvest.com, Mission Gate and a group of individual investors like Bas Godska, general partner at Acrobator Ventures.
Olga Bortnikova, her husband Ivan Bortnikov and Ivan Mikheev founded the company in Europe three years ago. The idea for the company came to Bortnikova and Bortnikov when a trip to China went awry after a tour operator sold them a package where excursions turned out to be trips to souvenir shops. One delayed flight and other mishaps along the way, and the pair went looking for better travel experiences and a way to share them with others. When they couldn’t find what they were looking for, they decided to create it themselves.
“It’s hard for adults to make friends, but when you are on a two-week trip with just 15 people in a group, you form a deep connection, share the same language and experiences,” Bortnikova told TechCrunch. “That’s our secret sauce — we want to make a connection.”
Much like a dating app, the YouTravel.Me’s algorithms connect travelers to trips and getaways based on their interests, values and past experiences. Matched individuals can connect with each via chat or voice, work with a travel expert and complete their reservations. They also have a BeGuide offering for travel experts to do research and create itineraries.
Since 2018, CEO Bortnikova said that YouTravel.Me has become the top travel marketplace in Eastern Europe, amassing over 15,900 tours in 130 countries and attracting over 10,000 travelers and 4,200 travel experts to the platform. It was starting to branch out to international sales in 2020 when the global pandemic hit.
“Sales and tourism crashed down, and we didn’t know what to do,” she said. “We found that we have more than 4,000 travel experts on our site and they feel lonely because the pandemic was a test of the industry. We understood that and built a community and educational product for them on how to build and scale their business.”
After a McKinsey study showed that adventure travel was recovering faster than other sectors of the industry, the founders decided to go after that market, becoming part of 500 Startups at the end of 2020. As a result, YouTravel.Me doubled its revenue while still a bootstrapped company, but wanted to enter the North American market.
The new funding will be deployed into marketing in the U.S., hiring and attracting more travel experts, technology and product development and increasing gross merchandise value to $2.7 million per month by the end of 2021, Bortnikov said. The goal is to grow the number of trips to 20,000 and its travel experts to 6,000 by the beginning of next year.
Godska, also an angel investor, learned about YouTravel.Me from a mutual friend. It happened that it was the same time that he was vacationing in Sri Lanka where he was one of very few tourists. Godska was previously involved in online travel before as part of Orbitz in Europe and in Russia selling tour packages before setting up a venture capital fund.
“I was sitting there in the jungle with a bad internet connection, and it sparked my interest,” he said. “When I spoke with them, I felt the innovation and this bright vibe of how they are doing this. It instantly attracted me to help support them. The whole curated thing is a very interesting move. Independent travelers that want to travel in groups are not touched much by the traditional sector.”
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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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Snapcommerce raises $85M to make over your mobile shopping experience
People are not only shopping digitally more than ever, they’re also shopping using their mobile phones more than ever.
And for mobile-first companies like Snapcommerce, this is good news.
Snapcommerce, formerly known as SnapTravel, has raised $85 million in what the company is describing as a “Pre-IPO” growth round to help further its mission of “changing the way people shop on their phones.”
The Toronto, Ontario-based startup has built out an AI-driven, vertical-agnostic platform that uses messaging in an effort to personalize the mobile shopping experience and “deliver the best promotional prices.” While it was initially focused on the travel industry, the company is now branching out into other consumer verticals — hence its name change.
Inovia Capital and Lion Capital co-led the new growth round, which included participation from Acrew DCF, Thayer Ventures and Full In Partners, as well as existing backers Telstra Ventures and Bee Partners. The financing brings Snapcommerce’s total raised since its 2016 inception to over $100 million. Its last raise — a $7.2 million round from Telstra and NBA star Steph Curry — took place in 2019.
The startup was founded by tech entrepreneurs Hussein Fazal, whose prior company AdParlor grew to $100+ million in revenue, then sold to AdKnowledge back in 2011; and Henry Shi, who previously built uMentioned and worked at Google, where he helped launch YouTube Music Insights, according to previous TechCrunch reporting.
Snapcommerce co-founders Henry Shi and Hussein Fazal. Image courtesy of Snapcommerce
Snapcommerce launched its first, travel-focused product in 2017. It works by using chatbots to interact with customers via messaging apps such as SMS, Facebook and WhatsApp. But the company also has human agents ready to help if people need more assistance, in the past essentially serving as on-demand travel agents.
Its service is not just for hotels and flights, but also to help people book restaurants and activities too.
“Our focus has been on building that personal relationship,” Fazal said. “Many people end up coming back to us when they travel again.” In fact, over 40% of its sales in 2020 came from repeat customers.
Over the years, the company claims to have helped more than 10 million users globally save over $75 million. It expects to cross over $1 billion in total mobile sales this year.
And now it’s ready to branch out into helping consumers save money on goods.
“When shopping, it’s hard to find the right product and even if you do, it’s hard to find a good deal,” he said. “On a desktop, there’s ways around it. But on mobile, it’s virtually impossible.”
The company turned the corner to profitability three months into the pandemic in 2020, seeing a 60% spike in sales in the second half of the year compared to H2 2019, according to CEO Fazal.
It then decided to re-invest its profits to continue growing the business.
“The profitability during the pandemic gave us confidence that we could turn to profitability whenever we needed to and gave us control of our own destiny, which enabled this fundraise,” Fazal told TechCrunch. “The third quarter of 2020 ended up being our greatest quarter ever.”
The COVID-19 pandemic, naturally, only accelerated its growth as more consumers turned to mobile.
“We believe the next wave of power purchasers will be via mobile,” Fazal said. “Some of the new generation don’t even have desktops or laptops, and they spend all their time on their mobile phone and messaging. So we’re able to be at the forefront.”
Snapcommerce has an IPO in its sights, although no specific timeline. The company did not reveal its current valuation or hard revenue figures. The company makes money by either marking up prices provided by a merchant or charging the merchant a commission.
Chris Arsenault, partner at Inovia and Snapcommerce lead investor, said his firm “tripled up” on its investment in the startup after witnessing its success in the travel space.
“Other companies out there only care about the transaction, and force consumers to look through several services to see if they got the best price, all the while telling them ‘there’s only two seats left,’ ” he told TechCrunch. “We believe that consumers aren’t going to accept that type of pressure-selling in the future. And Snapcommerce’s ability to build trust with its customers and service providers has attracted us to them as they are defining what the future of commerce is going to be like.”
Ultimately, the company plans to use its fresh capital to continue to scale with the goal of streamlining the entire mobile search, purchase and fulfillment process and make finding “the right item at the right price as easy as sending a message to a trusted friend.”
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