TravelPerk Raises $ 160 Million As VC Bets on Business Travel Rebound
Avi Meir, CEO and co-founder of TravelPerk.
LONDON – Venture capitalists are pumping hundreds of millions of dollars into business travel startups with the belief that business travel will rebound in 2021.
Barcelona-based TravelPerk on Thursday announced it had raised $ 160 million in a new round of funding. The investment included both equity and debt financing, and was led by Greyhound Capital. TravelPerk helps small and medium-sized businesses book flights and manage their expenses through its online platform.
And it’s not the only business travel platform to collect large sums of money. In January, California-based TripActions raised $ 155 million at a valuation of $ 5 billion, up from $ 4 billion in mid-2019. TravelPerk declined to disclose its valuation, but CEO and co-founder Avi Meir said the deal was made on terms favorable to the start-up and its investors.
âThe reality is that travel is coming back,â Meir told CNBC in an interview Thursday. “It’s not a belief anymore, it’s actually visible in the numbers.”
In the United States, for example, TravelPerk saw a 70-75% recovery in domestic flights from pre-pandemic levels, Meir said. âMost flights are not yet 100% full, but we are talking about an industry that was 10 to 15% exactly one year ago,â he added. “Going from 10 to 15% of the baseline to 75% shows that the trend is definitely up.”
The travel industry as a whole was hit by the coronavirus pandemic last year, as governments took action to curb the spread of Covid-19 across borders. But some investors are betting on a resurgence in international travel as vaccine deployments begin and public health restrictions are gradually lifted.
However, the recovery in travel is likely to be patchy. India, for example, has seen a devastating spike in cases in recent times, reporting more than 300,000 new infections a day over the past week. The country on Wednesday passed a dark milestone of 200,000 deaths linked to Covid-19. Meanwhile, vaccine deployment in Europe has got off to a painfully slow start, but is starting to pick up speed.
âWe’re going to live in this state of uncertainty for, I think, the next 12 months, if not longer,â Meir said.
Meir says TravelPerk has taken a “very different path” from other travel companies that have cut thousands of jobs in a bid to cut costs and survive the Covid crisis. “We haven’t made any layoffs,” he said, adding that the company is maintaining robust customer support operations “to be there while the storm passes.” As a result, Meir says, TravelPerk even managed to grow its customer base by 80% in 2020.
The company says it has also invested in a few new products to help its customers overcome coronavirus uncertainty. One, called TravelSafe, displays the latest data on Covid travel restrictions while another, FlexiPerk, guarantees an 80% refund on trips canceled at the last minute.
Corporate travel management is a competitive space with big historical players like SAP. But Meir says he doesn’t see SAP’s Concur platform as a direct competitor because it’s more focused on large enterprise customers. TravelPerk has a number of start-ups as clients, including Revolut, Wise, GetYourGuide, and Farfetch.
âThere is no doubt that from 2021 the average business trip will be very different from what it was in 2019,â Ines Verschueren, investor at Greyhound Capital, told CNBC. âBusinesses are looking for more efficient ways to manage their travel and will place great value on technology platforms that offer superior choice, flexibility, customer service and due diligence.