Andreessen Horowitz Leads $154M Investment In TripActions, Valuing Corporate Travel Startup At $1B - http://travelporn.info | luxury travel sitesNovember 8, 2018 11:01 am
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Corporate travel isn’t typically seen as a rewarding experience. TripActions, a Palo Alto, Calif.-based startup now valued at $1 billion thanks to a $154 million funding round led by Andreessen Horowitz, wants to change that.
Similar to Kayak, TripActions offers employees a range of options as they book their trip. Employees that opt to spend less — whether it’s choosing a hotel a few extra blocks walk away or a discount airline — get rewarded with cash or gift cards for their choices.
The business customer saves on travel costs. TripActions makes money through contracts with companies and then a fee for every trip booked. It’s a model the three-year-old company says will lure more corporate clients from stalwarts Concur, Carlson Wagonlit and American Express Global.
With the Series C funding, announced Thursday, TripActions will invest in technology and customer service, an edge it says should help it encourage more business travelers to use it. Andreessen Horowitz general partner Ben Horowitz will also join its board. The investment brings the company’s total funding to $236 million and values it at more than $1 billion, says TripActions.
That cash pile overshadows investments in Rocketrip, which offers a similar reward service for travelers, and has raised just $32 million, according to PitchBook.
“We started with the business-to-business part, but once we win the account, we are obsessed with the users,” says CTO Ilan Twig, who co-founded the company with CEO Ariel Cohen.
TripActions works like this: it pulls in travel deals from all over the internet, including Booking, Priceline and Expedia, in a service similar to consumer travel booking site Kayak. It uses machine learning to then narrow down preferences of what it believes the employee might like, based on age, gender and title, plus any loyalty programs the employee belongs to or other additional profile information.
Getting companies to sign up for corporate travel savings isn’t as hard as getting their employees to use it. Rewards help, but a bad travel experience can ruin it all, so the 400-person company is also investing heavily in customer support: It has around-the-clock support staff so if anything goes wrong with a delayed flight, customers are automatically re-booked on what the technology guesses is the best alternative and the hotel and rental car companies are notified of a late arrival.
The company claims revenue has grown 700% over the last year, and continues to grow 20% month-over-month, but it declined to disclose revenue numbers to Forbes, citing fear of competition. The company is not yet profitable, as it invests in staff.
Its clients are saving 34% on their hotel costs, says Cohen and it’s attracting more businesses to sign on. So far, it counts companies like Lyft, Dropbox and Procore as clients, all mid-sized businesses, but Cohen says it’s close to announcing its first enterprise-sized client. As for going toe-to-toe with the corporate travel giants to take their customers? Cohen simply calls it a “matter of time” before TripActions gets a really big share.