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A race for growth is taking place among the swath of startups aiming to crack the travel management market for small- to medium-sized companies. Now that a variety of players are more established, sights have been set on offering a global set of solutions for clients that operate worldwide.
One of the most well-funded of these is Palo Alto-based TripActions, which has started expanding globally in an effort to outpace its growing competitors. The company raised a $51 million Series B round in March, 2018, which it will use to staff service centers in Europe and Asia-Pacific. It has raised $77.5 million since its inception in 2015 and now employs more than 200 workers.
TripActions’ first office outside the U.S. has opened in Amsterdam, with a satellite office planned for London later this year.
“A lot of people tried to disrupt the major travel management companies, and they always failed,” said Ariel Cohen, CEO of TripActions. “We had this vision to be an upstart that is always going for it and creating an end-to-end business travel solution that includes the globe. Raising money is the way to do it. I don’t think you can say you are going to disrupt a $1.5 trillion industry with $2 million dollars. We are adding 25 agents every month globally, we want to make sure we are getting a bigger type of customer that we are able to service no matter where they are. That’s the difference between all the startups that tried to do it and couldn’t.”
For the time being, TripActions will stick with the technology it has instead of doubling down on reinventing the corporate booking tool or something like that. It sources air rate content from Sabre and hotel rates from Booking Holdings, and makes money by charging customers a booking fee for each trip. All the personal service afterward is free, including phone calls, unlike the model adopted by traditional travel management companies where they charge for calls.
Cohen thinks the tech platform is solid already, and it’s smarter to improve service for existing customers and have that infrastructure already built to draw in new clients. He’s also concerned about maintaining a high level of service regardless of which office is actually servicing a client, which can be a challenge for a startup based in California facing 23 percent month-over-month growth from around 1,000 customers.
“The infrastructure needs to be there: fulfillment, travel operations, customer success, and knowing the travelers by name,” said Cohen. “We have good technology, a mobile app that is second to none in the corporate space, using a lot of machine learning to personalize the experience and understand [when a disruption will happen]… you need technology, which we have already, and we need to have really good service. Maybe this is what people were missing when they tried to disrupt the space. Travelers will want to call and to chat, to get service from [a real person]. We have a goal that all interactions will get answered in 40 seconds, a very high goal, and we want to do it globally.”
Many business travel startups seemed to have plateaued recently, one of the difficulties of attempting to disrupt an entrenched global industry dominated at the top by a handful of players. Sometimes, they end up trying to reinvent the wheel with new user interfaces or end up pivoting to developing a business-to-business technology that can fit into the existing travel management ecosystem.
TripActions is taking a different approach by becoming a global travel management company that transacts mainly through their app but has people on call 24/7 for specific traveler requests. Perhaps a more global and varied set of travel partners will also be necessary in time to fulfill the complex needs of globetrotting road warriors.
Quality, consumer-grade customer service is almost always an afterthought in corporate travel. Giant travel management companies claim to provide world-class service, of course, but rarely do in practice.
We’ll see in time if happy customers are enough to propel TripActions on a global growth spree.