TravelPerk Acquires Click Travel - Pandemic Acquisition

TravelPerk Acquires Click Travel in Significant Deal

TravelPerk, a prominent platform for booking business trips, has successfully acquired Click Travel, a UK-based competitor. While the financial details of the transaction remain undisclosed, it represents TravelPerk’s largest acquisition to date.

Strategic Acquisitions for Growth

Since the onset of the pandemic in Europe last year, the Barcelona-based startup has actively pursued a strategy of acquisitions. In the summer of 2020, they acquired Albatross, a risk management startup, to enhance resilience against the impacts of COVID-19.

Subsequently, in January, TravelPerk expanded its US market presence through the acquisition of NexTravel, a US-based company.

Expanding Market Reach

This latest acquisition strengthens TravelPerk’s position in both the UK and European markets. Click Travel’s client base of over 2,000 small and medium-sized enterprises (SMEs), including well-known brands like Five Guys, Red Bull, and Talk Talk, will be integrated into TravelPerk’s network.

Post-acquisition, the total customer count will exceed 5,000.

Financial Impact and Market Leadership

Click Travel manages approximately £300M in business travel expenditure for its clients, which will significantly contribute to TravelPerk’s revenue streams. TravelPerk now positions itself as the leading travel management platform specifically tailored for the SME market on a global scale, and within the UK.

Growth Projections and Market Focus

CEO and co-founder Avi Meir stated that while TravelPerk operates globally, its primary growth areas are anticipated to be the US and Europe this year. He noted that the US currently represents the largest market due to travel restrictions in the EU and UK.

Meir projects a 200% growth rate in 2022, contingent on the absence of renewed travel restrictions, with robust expansion in core US and EU markets.

Click Travel’s Background and Investment

Founded in Birmingham in 1999, Click Travel has historically received limited venture capital funding, according to Crunchbase. However, in 2018, the company participated in the government-backed Future Fifty scale-up program.

Furthermore, it secured a “multi-million pound” investment from the UK-based Business Growth Fund.

Cultural Alignment and Shared Vision

James McLean, CEO of Click Travel, emphasized the shared “mission” of both companies to simplify and reduce the costs associated with business travel, rather than focusing on the pandemic’s impact.

“The synergy between our companies, coupled with a strong cultural fit, makes us incredibly enthusiastic about combining our teams,” McLean stated. “Integrating TravelPerk’s expertise, technology, and customer support with our own capabilities creates a compelling offering.”

Investment and Future Integration

While Click Travel has primarily served the UK market, TravelPerk has maintained a global outlook from its inception. TravelPerk has secured substantial external investment, totaling nearly $300M since its founding in 2015.

In April, the company raised a $160M Series D funding round, supplementing a previous Series C round completed in July 2019.

The acquisition of Click Travel was financed by The Baupost Group, a Boston-based investment manager.

Optimism Amidst Ongoing Concerns

Despite ongoing concerns regarding the ‘Delta’ variant of the virus and its impact on COVID-19 rates in Europe and the US, TravelPerk’s Meir remains optimistic about the near-term prospects for the business travel sector.

He reports observing early signs of recovery in “key markets”.

Recovery and Market Performance

“TravelPerk is currently exceeding the market’s recovery pace and has already surpassed its 2019 revenue figures,” Meir revealed to TechCrunch. “The overall travel recovery is progressing, albeit at varying speeds across different regions.

For example, the US travel market is projected to return to pre-pandemic levels by the end of August 2021, based on TSA Checkpoint data.”

Strategic Growth and Acquisitions

“We anticipate a similar recovery globally in 2022,” Meir added. “We have distinguished ourselves as one of the few companies in the travel industry that has continued to scale and grow throughout the pandemic, without resorting to layoffs.”

“Since March of last year, our strategy has been to proactively invest in our product and global reach, positioning us to capitalize on the full recovery of travel. Today’s announcement is a significant step in that direction.”

Meir confirmed that TravelPerk is open to further acquisitions that align with its strategic vision and culture.

Integration and Staff Retention

Initially, Click Travel and TravelPerk will operate as separate platforms, but a “full integration” is planned, with both ultimately operating under the TravelPerk brand.

TravelPerk has committed to retaining all 150 Click Travel employees and maintaining the Birmingham office as a UK hub, in addition to its existing London location.

“The talented team at Click Travel was a key factor in our decision to acquire the company, and their retention was integral to the deal,” Meir emphasized. “We have no plans for redundancies and aim to integrate the entire team into the TravelPerk Group.”

Future Focus and Market Potential

When questioned about potential expansion into the enterprise segment, Meir acknowledged interest from larger businesses and expressed openness to the idea. However, TravelPerk remains primarily focused on the SME market, which it believes offers the greatest need and growth potential.

“This acquisition solidifies our position as the leading travel management platform for SMEs globally,” Meir concluded.

Adaptability and Environmental Responsibility in Travel

Meir discussed the shifts in business travel brought about by the pandemic, emphasizing two key areas where TravelPerk intends to focus investment: enhanced booking flexibility and a commitment to sustainability for reduced environmental impact.

TravelPerk is allocating over $100M to further develop its products in these domains – specifically FlexiPerk and GreenPerk, as stated by Meir.

He explained that travelers are now booking trips with significantly less lead time. Prior to the pandemic, searches typically occurred 7 to 30 days before departure. Currently, the majority of searches are for travel within 6 days. Therefore, flexibility is a highly sought-after feature in business travel, providing assurance against financial loss due to last-minute changes or cancellations.

Regarding sustainability, Meir noted a growing corporate focus on minimizing carbon footprints and overall environmental impact. Simultaneously, consumers are increasingly prioritizing eco-conscious choices to lower carbon emissions, potentially leading to increased adoption of train travel over flights. This shift may even necessitate a redesign of TravelPerk’s logo, which currently features an airplane.

“We anticipate substantial demand for our carbon offsetting service, GreenPerk,” Meir stated. “However, we also foresee alterations in travel preferences.”

“Rail travel is demonstrably more environmentally sound. Choosing a train instead of a domestic flight can decrease an individual’s carbon emissions by approximately 84%. We’ve been expanding our rail inventory for several years and expect train travel to become a more prevalent option for business travelers in the coming year.”

Concerning the evolving landscape of business travel in a post-pandemic, remote-work environment, Meir maintains that increased remote work opportunities will ultimately lead to a rise in overall business travel.

“While this may negatively affect daily commutes, it will likely stimulate more business travel,” he proposed. “Whether companies embrace fully remote or hybrid models, geographically dispersed teams will require in-person interaction. We foresee a new kind of business trip – one focused on team building, brainstorming, client meetings, and ‘bleisure’ – a blend of business and leisure travel.”