TravelPerk Raises $160M After Business Travel Downturn

TravelPerk Secures $160M in Series D Funding Amidst Travel Sector Recovery

The travel industry has faced significant challenges over the past year; however, TravelPerk, a business trip booking platform, has announced a $160M Series D funding round, signaling a potential turning point.

Funding Details and Investors

This funding round comprises both equity and debt and is spearheaded by London-based growth equity firm Greyhound Capital. Existing investors, including DST, Kinnevik, Target Global, Felix Capital, Spark Capital, Heartcore, LocalGlobe, and Amplo, also participated in the investment.

While the specific valuation and the proportion of equity versus debt remain undisclosed, the Series D represents a strong vote of confidence in TravelPerk’s future prospects, particularly considering the disruptions caused by the pandemic.

Company Growth and Funding History

Founded in 2015 and based in Barcelona, TravelPerk has now raised a total of $294M to date. This includes a $60M top-up in 2019 and a $44M Series C round in 2018, following a $21M Series B investment earlier that same year.

TravelPerk distinguishes itself by offering a consumer-like experience for business travel booking, catering specifically to ‘global SMEs’. The platform provides access to a vast travel inventory, allowing users to compare and book trains, cars, flights, hotels, and apartments from providers like Kayak, Skyscanner, Expedia, Booking.com, and Airbnb.

Platform Features and Services

The platform integrates booking capabilities with tools for businesses to effectively manage and report on their travel expenses.

TravelPerk offers a freemium tier for smaller teams, alongside 24/7 traveler support, flexible booking options, and an open API for custom integrations.

Resurgence of Investor Confidence

Despite a pause in funding announcements for TravelPerk in 2020 due to the pandemic, the company reported renewed investor interest starting in the fall of 2020. The closing of this Series D round, combining debt and equity, indicates a growing optimism among venture capitalists regarding the travel sector’s recovery.

This trend is further exemplified by the $155M Series E raise for U.S.-based TripActions in January, which achieved a $5BN valuation as U.S. corporate travel began to rebound.

Future Growth and Market Challenges

TravelPerk’s leadership expresses optimism about future growth, aiming to accelerate its global expansion despite ongoing challenges posed by the coronavirus in key markets like Europe and the U.S.

However, the pandemic continues to impact regions like India and Latin America, creating an uncertain outlook for business travel in the coming months.

Shifting Landscape of Business Travel

The traditional business trip has largely been replaced by virtual meetings, and remote work has become increasingly prevalent. This shift presents a challenge to the recovery of business travel, as companies reassess the value of in-person interactions.

Many offices remain closed, and concerns about contagion risk may continue to make work trips a difficult sell for some organizations.

Adapting to a New Normal

Despite these challenges, TravelPerk and its investors believe that business travel will eventually rebound. The company is focused on preparing for a more dynamic and unpredictable travel landscape.

“Travel is definitely coming back,” states CEO and co-founder Avi Meir. “We can see that already with the numbers. In the US for instance, we can see a 70-75% recovery in domestic flights compared to the baseline before COVID-19.”

Meir acknowledges that the global recovery will be uneven, with different countries reopening at different times and implementing varying restrictions. He anticipates a period of uncertainty lasting for at least the next 12 months.

“We’ve realised from speaking to our customers that the demand for travel is there, people are eager to do these trips, but this period of uncertainty makes it difficult for them so we’re focused on finding solutions that can address that.”

Strategic Investments and Acquisitions

Throughout 2020, TravelPerk prioritized product development and invested in initiatives to enhance its resilience to the impacts of COVID-19.

In October, the company launched an API to provide the travel industry with up-to-date information on coronavirus restrictions. It also acquired Albatross, a risk management startup, in July to bolster its own resilience efforts.

To expand its presence in the U.S., TravelPerk acquired YC-backed rival NexTravel in January, establishing a base in Chicago. Additionally, a partnership with Southwest Airlines was established to address a gap in its U.S. offerings.

Growth and Customer Base

Meir refrains from providing specific revenue growth projections, suggesting a cautious approach to short-term expectations.

However, he highlights that investors were impressed by TravelPerk’s ability to double its customer base in 2020, now exceeding 3,000 businesses, including prominent startups like Wise, Farfetch, GetYourGuide, and Monzo. The company also experienced nearly a 100% increase in travel budget under management over the past year.

“Last year we doubled the size of our customer-base and we now have over 3,000 businesses using the platform… The travel budget under management also increased by almost 100% over the last 12 months.”

Focus on Flexibility, Safety, and Sustainability

TravelPerk’s strategy centers around three key pillars: flexibility, safety, and sustainability. The company recognizes the importance of these factors for modern business travelers.

“Flexibility, because travel still has a lot of friction… Safety, so that every traveler knows… Sustainability, because in this period businesses have been taking stock and realising that we all have to do more.”

The company’s FlexiPerk tool offers refunds on cancelled trips, TravelSafe provides real-time updates on health guidelines, and GreenPerk allows customers to offset their carbon emissions through partnerships with organizations like Atmosfair.

Sustainability Efforts and Future Plans

While sustainability is a growing concern, the adoption of TravelPerk’s GreenPerk offsetting scheme has been limited, with only 10% of business volume currently offset.

Despite this, Meir anticipates a rapid increase in offset participation and plans to further develop GreenPerk with the new funding.

When questioned about supporting digital alternatives to travel, such as videoconferencing, Meir declined to comment, stating that the company is “working on some exciting ideas!”

Looking Ahead

TravelPerk remains optimistic about the long-term recovery of business travel, believing that in-person meetings remain essential. The company aims to “double down on growth” in the U.S. and Europe, with plans to expand its team and pursue further acquisitions.

“We expect to double down on growth in the U.S. and Europe and that includes making key hires… We aim to complete more acquisitions this year.”

Pogos Saiadian, investor at Greyhound Capital, expressed confidence in TravelPerk’s ability to thrive in the evolving business travel landscape, highlighting the platform’s comprehensive inventory, excellent customer service, and integration with existing technology stacks.

“There is no doubt that from 2021 onwards the average business trip will look very different… We are confident that business travel will recover and thrive… We believe that this is a huge long-term opportunity.”