GetYourGuide Secures $133M in Funding Amidst COVID-19 Travel Challenges

Following Germany’s recent announcement of a new lockdown aimed at controlling the increasing number of COVID-19 cases, a leading startup based in the country’s capital has revealed the completion of a substantial convertible note funding round to support its continued operations.

GetYourGuide, a company that, under normal circumstances, successfully builds and markets a popular platform for discovering, booking, and experiencing tours and activities worldwide – gaining traction through widespread sharing of user experiences on social media – has secured €114 million ($133 million) in funding through a convertible note.

This funding round is spearheaded by Searchlight Capital, with participation from investors including SoftBank Vision Fund, KKR, Battery Ventures, Highland Europe, Spark Capital, Lakestar, Heartcore Capital, NGP Capital, and the company’s founders.

According to the company, this convertible note will be exchanged for equity during the next funding round, granting investors a stake in the company proportionate to its valuation at that time.

The company anticipates this next equity round will occur within 12 to 18 months, which may explain why a convertible note – also known as a Convertible Loan Note – is being utilized as a financing instrument.

For reference, the company’s previous valuation exceeded $1 billion following a $484 million Series E funding round in 2019.

This investment arrives during a particularly challenging period, not only for Germany and the global community, but specifically for the tourism and travel sector, which has been significantly impacted by travel restrictions, facility closures, and decreased consumer confidence in public gatherings.

Johannes Reck, co-founder and CEO of GetYourGuide, characterized the situation in March as a “nuclear winter.”

Business experienced a modest recovery during the summer months, with GetYourGuide observing a 60% increase in ticket sales within Germany. Furthermore, there was a noticeable trend of customers making bookings well into the future. However, the company recently reduced its workforce by approximately 100 employees as part of a cost-reduction strategy aligned with current and projected market conditions.

Despite these challenges, GetYourGuide reports a total of 45 million tickets sold on its platform, representing a gain of 5 million since January of this year – a considerable deceleration in growth that reflects the difficulties faced by businesses in this industry, and likely deviates from initial expansion forecasts.

The company remains focused on its long-term goals, including a potential initial public offering (IPO).

Reck stated that this fundraising round was among the simplest the company has completed, indicating continued investor confidence and a willingness to support promising companies navigating the current crisis.

“This new capital was raised easily, because our investors believe in our mission,” he explained to TechCrunch. “The pandemic represents the most severe crisis in tourism history, but it has also demonstrated that leisure travel is a fundamental human desire. Throughout this period, people have continued to dream of future travel, and when they are able to travel again, experiences will be their top priority.”

In a separate statement released with the funding announcement, he reiterated this optimistic outlook:

“Following the pandemic, people will resume traveling, and the opportunity to experience the sights and culture of the world’s most renowned destinations will be highly sought after,” he said.

This suggests a belief in the overall resilience of the industry – encompassing not only GetYourGuide, but the broader travel sector – and its ability to attract new investment. Eric Zinterhofer of Searchlight Capital is making his first investment in the company with this funding round.

“We are naturally drawn to the talented and entrepreneurial team at GetYourGuide, given Searchlight’s own dynamic culture and our track record of successful partnerships with founder-led businesses,” he commented. “While 2020 has presented significant challenges for the travel industry, we are confident that GetYourGuide possesses the appropriate strategy, capabilities, and investor support to achieve a strong recovery once the pandemic is brought under control. We look forward to collaborating with them.”