Barcelona-based business travel startup TravelPerk wasn’t planning on raising a $160m Series D round this early into the year. But the investment community had other ideas.
“We actually weren’t going to raise now, we thought to wait until the end of the year,” says founder and chief executive Avi Meir.
“[But] smart investors are looking for Covid winners and they want to bet ahead of the curve. So the timing was kind of pushed by the market.”
The round, led by Greyhound Capital with participation from existing investors, was prompted by the business community’s eagerness to get travelling again, according to Meir.
He points to the strong return of domestic flights in the US, which he says have rebounded to 75% of pre-Covid levels.
“In the US, in most of the states they don't have any legal restrictions on travel,” he says. “Whenever restrictions are lifted, people immediately go back on the road. So there's no mystery there.”
But while Meir insists that business trips aren’t going anywhere (“the meetings that matter happen in person” is his mantra), he is clear that professional travellers have different expectations since the pandemic hit.
“When we speak with our customers, we hear about two points from every single customer: these are flexibility and sustainability,” he says.
As anyone who has taken a Covid-19 PCR test will know, international travel is not as painless as it used to be. And while business travellers adapt to a new mentality — with last-minute flight changes and ever-shifting restrictions to contend with — TravelPerk says that two of its product innovations can help take the stress out of trips.
The first is called 'FlexiPerk', a flexible booking tool that deals with last minute cancellations and guarantees users at least 80% of their money back, no matter how late the change.
“We actually had this product before Covid and it has basically become the main reason why people choose TravelPerk these days,” says Meir.
Another well-timed product launch came from TravelPerk’s acquisition of risk management startup Albatross in July 2020. The result was a new feature in the company’s booking platform, 'TravelSafe', which allows users to easily monitor the various restrictions that might apply to their trip.
“When you do a search, for example, 'I’m flying from London to New York', we will tell you in real time: what is the situation in New York? Can you go there? Do you need a PCR test? Do you need a vaccine certificate or not? Do you need to quarantine?” Meir explains.
The TravelPerk founder believes these features have been a big factor in the company growing its client base by 80% in the last 12 months, the worst ever year for business travel.
While many people are itching to travel and meet in person again, another byproduct of the pandemic has been an increased awareness of our carbon footprint. Is it always necessary to take a flight for a one-hour meeting that could be done over Zoom?
Meir says this sentiment has increased customer interest in TravelPerk’s 'GreenPerk' carbon offsetting scheme. TravelPerk users can choose to pay extra to offset the emissions for their business trips (on average 4% extra on the total booking fee).
The money is donated to Germany-based carbon offsetting organisation atmosfair, and Meir says that currently around 10% of the TravelPerk’s customers choose this option.
Reflecting on a recent move by the French government to ban short-haul flights that can be easily replaced by a train journey, Meir is also mindful that the global culture of air travel is due a shakeup.
“[With trains] we're talking about a more convenient, less polluting way of travelling, that just happens to be more expensive. So people choose a flight,” he says. “If the government is going to fix this anomaly, we are very supportive of any initiatives. Subsidies, for example, to make flights less expensive — maybe that’s not the right place to put a subsidy. Let the market decide, and rail will win. So I'm all for it.”
Meir says that much of the funding will go towards supporting TravelPerk’s organic growth in its core markets of the US and Europe.
And as the US and UK look set to lift travel restrictions earlier than other countries, in line with fast vaccination rates, he expects these countries to be the focus of new hires: “We're going to invest in the US and UK. I expect to hire pretty massively in these two countries in the coming 12 to 24 months.”
A portion of the new funding will be set aside for TravelPerk to make new acquisitions in key markets (the company already acquired US rival NexTravel earlier this year).
And while Meir is mindful that some types of business trips might be gone for good, he believes the new working model of distributed and remote teams will open up new opportunities.
These include more semi-regular travel by remote workers to head offices, and a greater demand for team building and away days. “Every company I talk to is planning some kind of team meeting in person during the summer,” he says.
Meir is hopeful that Zoom fatigue and a desire for face-to-face interaction will kickstart business travel as soon as Covid-19 restrictions begin to lift. Whether or not the volume of trips will rebound to pre-pandemic levels will be the big question for the company as it plans its next stage of growth.