TravelPerk CEO and co-founder Avi Meir.
TravelPerk
Barcelona-based startup TravelPerk, which helps automate corporate travel and expenses, has raised $104 million in fresh funding from Japanese tech investing giant SoftBank and a flood of other names, to speculate in artificial intelligence development and recent products.
The corporate said Tuesday that it raised the money in a recent equity round led by SoftBank Vision Fund 2 and backed by existing investors Kinnevik and Felix Capital. TravelPerk said it plans to make use of the cash to speculate in continued company growth and product expansion.
TravelPerk primarily uses AI technologies like machine learning and neural networks within the back end to assist automate numerous the manual tasks involved in corporate travel — for instance, connecting users with the perfect prices for flights and accommodation.
“Traditionally, when you have a look at legacy players, like American Express or Expedia, or holiday travel sites, a lot of the work is finished manually by travel agents,” Avi Meir, CEO and co-founder of TravelPerk, told CNBC.
“That is certainly one of the the explanation why you do not really see huge success at scale with travel, because technology was not used, and technology is the way you scale today.”
SoftBank invested $70 million in TravelPerk’s latest round, which the corporate said was an extension of its “D-1” funding round. The fundraising round shows SoftBank is placing a serious bet on an organization driving disruption in corporate travel through recent technologies, akin to AI — which has seen significant buzz for the reason that November 2022 launch of OpenAI’s ChatGPT.
The most recent fundraising round lifts TravelPerk’s valuation to $1.4 billion, a touch above the $1.3 billion at which TravelPerk was assessed during its previous money raise a 12 months ago.
An “upround,” where a non-public startup pulls in funds at the next share price, became a rare event over the past 12 months or two amid sky-high rates of interest.
Investing in AI that is not for ‘show’
Meir poured cold water on a number of the buzz around AI, saying that numerous the experimentation he sees with generative AI tools like ChatGPT looks as if more of a “show” than a practical adoption of AI for improving cumbersome problems in travel business.
He said TravelPerk is running on a far leaner operating model than incumbents within the legacy travel agency market. Whereas many travel agents operate on low single digits gross margins, Meir says that TravelPerk’s profit margin stood at 60% last 12 months.
“What we did in 2023 is, with using AI, principally automated numerous these sorts of back office manual processes,” Meir told CNBC. “It’s less sexy than having a chat bot, but it surely’s value it,” said Meir.
2023 a 12 months of ‘hyper growth’
TravelPerk also intends to make use of the fresh money to fuel an acceleration of its gross profit, which grew 90% in full-year 2023 through automation and AI. TravelPerk made annualized revenues of $150 million in 2022, based on its co-founder and CEO Avi Meir.
TravelPerk had a tricky time over the Covid-19 pandemic, when travel of every kind, not only corporate trips, ground to a halt to stem the spread of the virus.
The corporate has since benefited from a resurgence in international travel, as vaccine rollouts enabled public health authorities to lift travel restrictions across the globe.
“Not only are we out of the pandemic, we’re back to hyper growth. 2023 was our greatest 12 months ever. We grew revenue greater than 70% year-over-year, on a pretty big base,” Meir told CNBC.
TravelPerk competes with American Express, BCD Travel, SAP Concur and Navan in the company travel management space.
Will IPO when ‘ready’
Post-Covid-19, Meir says, TravelPerk’s growth has been on a tear. He sees the firm reaching profitability on a monthly basis by the top of 2024 and quarterly profitability by the top of 2025.
TravelPerk has continued hiring, moderately than shedding staff, as several other travel tech firms have done. The corporate brought on 50% of its staff within the last two years, based on its CEO.
Meir said that TravelPerk has no immediate plans to go public, as his intention is to construct an organization that might be around in 100 years. Nonetheless, an initial public offering is something the corporate can be “ready” to do if and when it approaches that event, he added.
TravelPerk hired a recent chief financial officer, Roy Hefer, last 12 months, who has experience in taking firms public and was a part of two tech IPOs within the U.S.
