If he were around today, Gordon Gekko of the movie Wall Street would probably say, "Cheap money is good." A combination of factors has made it relatively more easy to obtain funding for startups in many countries.
Travel Startup Funding This Week
Each week we round up travel startups that have recently received or announced funding. Please email Travel Tech Reporter Justin Dawes at [email protected] if you have funding news.
The total funding publicized this week was more than $98 million.
>>Secret Escapes, a flash-sales site for luxury vacation deals, raised $67 million (£52 million).
Old Mutual Global Investors provided the investment. It was only last October that Secret Escapes had a Series D and debt facility round of investment, led by Temasek, for $111 million. Since its founding in 2009, Secret Escapes has secured $153 million in capital.
Secret Escapes claims to be profitable, has 50 million members of its free-to-join website, and that its revenue has grown at a compound 185 percent a year rate. It had told the Financial Times it had revenue of about $54 million in 2015 on gross bookings without tax of $225 million. But it hasn’t broken out numbers since.
Secret Escapes has about 850 workers across eight offices, with more than 250 employees in London alone. The startup’s success suggests that there is life in the members-only flash-sale concept — an idea that had a heyday in the U.S. during the financial crisis with companies like JetSetter, Groupon, and Travelzoo attempting to cash in.
Secret Escapes plans to use some of the funding to expand its use of dynamic packaging — or letting shoppers pick the exact flight or hotel they want from a menu rather than a pre-set bundle.
>>Peerspace, an Airbnb of event spaces, raised $16 million in funding in a Series B round.
GV, formerly known as Google Ventures, led the round. It was joined by past investors including Foundation Capital and Red Bridge Partners. The startup has raised more than $34 million since its founding in 2014.
The San Francisco-based company acts as a marketplace where people can post their space and host events, somewhat similar to Breather, which offers on-demand meeting spaces in major cities.
The startup has raised more than $25 million to date. Eatigo is present in six countries, including the Philippines, Hong Kong, India, and Malaysia, and says it has more than four million users.
“On top of funding, [TripAdvisor provides] valuable support on scaling our company, structure and processes,” said Co-founder and CEO, Michael Cluzel. “We also collaborate on the commercial front – from common sourcing to selling Eatigo inventories on TripAdvisor.”
>>PaulCamper, a recreational vehicle marketplace founded in Germany, has raised $3.8 million (€3 million) in a Pre-Series A investment.
Russmedia, a growth equity investor, led the round in the Berlin-based startup. Mairdumont Ventures also participated.
Founder and CO Dirk Fehse began the business by lending his campervan “Paul” to other camping enthusiasts eight years ago. Today it offers Airbnb-style listings in Germany, the Netherlands, and Austria. Camping van and mobile home owners can rent their vehicles to people who are looking to rent.
PaulCamper, founded in 2013, claims to have facilitated more than 230,000 overnight stays and that it has 3,000 people leasing vehicles on the platform. It also runs a camping community fund to help campers who have struggles affording the trip and vehicle repair.
>>SaffronStays, a vacation home network, has raised $2 million in Pre-Series A funding.
Sixth Sense Ventures led the round in the Mumbai-based alternative lodging marketplace.
Launched in 2015 by Devendra Parulekar and Tejas Parulekar, SaffronStays exclusively curates and manages hospitality operations, reservations, branding, and marketing for private vacation homes.
Mentored by angel investor Sanjay Mehta, it operates 45 homes across six states and claims to host more than 1,500 guests every month.
Have an aviation-themed startup? Take it to the next level by participating in the Air Pitch Startup Competition 2018.
Skift Cheat Sheet:
We define a startup as a company formed to test and build a repeatable and scalable business model. Few companies meet that definition. The rare ones that do often attract venture capital. Their funding rounds come in waves.
Seed capital is money used to start a business, often led by angel investors and friends or family.
Series A financing is typically drawn from venture capitalists. The round aims to help a startup’s founders make sure that their product is something that customers truly want to buy.
Series B financing is mainly about venture capitalist firms helping a company grow faster, or scale up. These fundraising rounds can assist with recruiting skilled workers and developing cost-effective marketing.
Series C financing is ordinarily about helping a company expand, such as through acquisitions. In addition to VCs, hedge funds, investment banks, and private equity firms often participate.
Series D, E and beyond These mainly mature businesses and the funding round may help a company prepare to go public or be acquired. A variety of types of private investors might participate.
Photo credit: A holiday vacation escape in Thailand available via members-only travel booking website Secret Escapes. The London-based online site for discounted travel has secured $153 million in capital in the past few years. Secret Escapes