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.”