The largest online travel multinationals — Booking Holdings, Ctrip Group, Expedia Group, and TripAdvisor — are too powerful. They swallow all the marketing and financial oxygen, making it difficult for young startups to compete and thrive. Or so the conventional wisdom goes.

A possible exception may prove the rule: Kiwi.com, a travel tech startup based in Brno in the Czech Republic. This online travel agency processed $925 million in gross bookings last year.

For 2018, the company forecasts it will book revenue of about $200 million, based on its run rate thus far. It expects it “will way exceed” the value of plane tickets it sold last year, by at least 25 percent year-over-year. About a quarter of its sales will come from U.S.-based ticket buyers.

Yet Kiwi has said it has raised only about $1.7 million, or €1.5 million, in funding.

One reason: Venture firms shy away from funding startups that are going up directly against the large tech incumbents on product — or rely too heavily on the platform companies to acquire and keep customers.

As we noted five years ago, well-funded travel startups struggle to prove that they can achieve scale and get into the position where their unit economics are so attractive that they spur even more growth without being dependent on, or easily challenged by, the largest online companies.

We can name a couple of examples of companies that have gotten to a certain level of success but then face an uncertain path to scale globally. HotelTonight, an online travel agency, has been in limbo. In 2016, Hipmunk sold to SAP-owned Concur. Corporate travel tech giant acquired Hipmunk, a price-comparison search engine, in 2016. That’s a respectable outcome, but a disappointment for investors who poured in $55 million.

Against that backdrop, how will Kiwi perform?

A Flightless Bird?

Unlike Hipmunk, Kiwi is an agency, servicing travelers. It has also grown faster. Last year, Deloitte named Kiwi the fastest-growing technology company in Central Europe, by revenue.

Today the startup has around 2,100 workers.

Kiwi’s traffic saw global growth of 69 percent in the third quarter, year-on-year, according to analytics firm SimilarWeb, which aggregated desktop and mobile web traffic (not including Kiwi’s apps) for all of the brand’s domains. For example, in the month to August 18, Kiwi received 7.4 million unique visitors — 12 percent of which came from U.S. users.

The growth hasn’t been enough to attract a top-tier venture firm to invest, though, despite two years of off-and-on talks.

Will Kiwi follow Hipmunk’s fate? Or will it be more like, say, Agoda, the online travel agency based in Asia that Booking Holdings acquired and is now scaling globally? Alternatively, will it be like Despegar and list on public markets?

Kiwi recently advertised for a new position of a mergers and acquisitions manager who ideally has experience in dealing with “mainly early-stage startups” and has the skills to supervise the integration of acquired companies.

Clearly, by advertising for such a position, it thinks its rumored funding round will close. However, funding is merely one hurdle.

Check out the following ways Kiwi has tried to create its whitespace where it can grow despite the long shadows cast by industry giants.

Give More Customer Service

Kiwi was founded in 2012 in Brno, the Czech Republic, as a price-comparison engine like Hipmunk, Kayak, Skyscanner, or Qunar.

Kiwi gained traction by combining flight segments from low-cost carriers with ones on traditional airlines. Think: flying EasyJet partway to your destination and Lufthansa the last leg.

Legacy online travel companies steered clear of this segment of sales, assuming that it would be low-margin — given that airlines often pay low to no commissions for selling tickets. Plus the established brands thought it would be a hassle to serve customers who would want help if a delay or cancellation caused them to need to rebook their onward flights or find last-minute overnight lodging.

In early 2014, when Kiwi wanted to advertise on metasearch, then-independent Momondo was the first to be willing to work with the company. Momondo, and later other aggregators, insisted Kiwi find a way to serve customers in case of problems.

Kiwi outsourced customer care to a company in Ukraine. After a year, it became clear that for quality control, Kiwi needed to bring that work in-house.

Luckily, it learned how to provide service to passengers cost-effectively through a mix of live agents and a mobile app that, in the event of a disruption, automatically proposes to a traveler a next-best option for their approval.

Do the Math

Even today, Priceline, Expedia, eDreams, and other widely used online travel agencies in Europe still don’t offer so-called virtual interlining.

Kiwi insists that, while virtual interlining sounds simple, it’s a computational problem that mathematicians characterize as a non-deterministic polynomial-time hardness hard problem. In other words, Kiwi has more than 450 developers tackling the problem, and in October, it’s running a contest for coders worldwide to try to invent even better interlining solutions. It’s also expanding its offices in Barcelona, where the weather and nightlife are attractive to the most talented coders.

Skeptics might say that any of the legacy companies could duplicate all of Kiwi in short order if it chose. A case in point: After it decided to challenge Airbnb in an inventory race, Booking.com went from listing only 425,000 alternative accommodations as of February 2014 to listing more than 5 million as of July 2018.

To be sure, the online giants insist they’re not harming competition. Last week CEO Gillian Tans wrote on LinkedIn that she thought the boom in artificial intelligence and machine learning technologies is “a great equalizer” as “there are no veteran artificial intelligence practitioners.”

A faith in capitalism requires a belief that “entrepreneurs, software engineers, and new innovations will undo these increasingly dominant franchises” over the long-term, as renowned investor Fred Wilson blogged this week.

But recent numbers may tell a different story. Thousands of travel startups have launched since 2005. Only a handful of those consumer companies — including Airbnb, Despegar, eDreams, MakeMyTrip, Traveloka, and Tujia — have scaled up.

A few of those survivors may be acquired by the tech titans soon. Data from The Economist suggests that “tech giants try to squash startups by copying them, or they pay to scoop them up early to eliminate a threat.”

Use Currency Arbitrage

Kiwi, like any online travel agency, has to pay a fee if it wants to advertise its airfares in price-comparison search engines like Kayak, Skyscanner, Qunar, and Google Flights.

If it wants its fares to appear as prominently as possible, it must pay a premium. But there’s a caveat to that. The metasearch platforms will boost the visibility of the cheapest offers. If you can underprice rivals, Google Flights, for example, will put its thumb on the scale, so to speak, and show your fares at or near the top of its metasearch results without charging your company a premium.

Kiwi has managed to get visibility in metasearch by underpricing competitor agencies by locating agencies and ticketing partners in multiple countries and issuing tickets in whichever one of more than 40 countries has a currency offering the best price.

Currency arbitrage isn’t free. However, it has been cost-effective, compared with competing with giant conglomerates for top spots in metasearch ad auctions or advertising on TV.

The move can be risky. In early 2015 the Russian rouble made a sharp decline that Kiwi’s computers didn’t properly account for, and the company sold too many tickets below cost by accident. It had to sell 10 percent of the company to an investor to raise the missing cash. The company now engages in currency hedging as a backstop.

The bigger Kiwi gets, though, the more it will presumably have to compete head-to-head with rivals on generic prices without resorting to tricks — if trade history is any guide.

Get Lucky

Kiwi has benefited from Ryanair, the largest discount carrier in Europe, doing business with it while being commercially hostile with Priceline, Expedia, and Orbitz — among the top three largest online sellers of flights in Europe.

For example, a recent search for November flights between Prague and Wroclaw, Poland, turned up lots of Ryanair options but none on Priceline, Expedia, or Expedia’s sister brand Orbitz. Ryanair’s gripe is complicated, but it boils down to compensation and branding issues.

If you want to become known among consumers and metasearch platforms for having the lowest prices, it helps to have Ryanair as an unexpected ally.

Luck can change, though. For a while, JetBlue stopped participating in Kiwi. While in test searches we saw the U.S. carrier’s flights back in Kiwi’s results, the hiccup showed the risk. Kiwi has tried to minimize this by setting up direct distribution deals with more than 150 airlines. It offers tickets for hundreds of others indirectly, such as through data from distribution tech company Amadeus.

Diversify Demand Sources

Kiwi sources a large majority of its traffic from only a few metasearch players. If those marketplaces cut it off or made playing their advertising game costlier, the company could stumble not unlike how Trivago has wobbled.

The startup is responding by integrating an as-yet-undisclosed, third-party price-comparison service’s results next to its own online travel agency content. Customers will be able to do a price check about whether they might be able to buy the same itinerary cheaper elsewhere.

The goal is to instill consumer confidence that Kiwi offers the lowest price one way or another.

It’s unclear if consumers will like the option or find it confusing.

But the move parallels price-comparison widgets from companies like Triptease that some hoteliers use on their brand.com websites to persuade consumers that the best deals can be found by booking direct.

This week, though, TripAdvisor has begun playing a meta on meta marketing game, too — a reminder that the giants are always on the prowl.

Long-term, Google Flights is going to be the only pure metasearch player left in the market one day, predicted Oliver Dlouhý, CEO and co-founder of Kiwi, in an interview while attending Skift Global Forum.

Supporting that idea was the news in September that Skyscanner intends to gradually source more online travel agency bookings via instant, “book on Skyscanner” offers serviced by its sister online travel agency brands rising from 4 percent today to 20 percent within several years. Its direct distribution deals with airlines combined with its instant booking functionality make it effectively a “lite” agency already for a substantial chunk of its bookings.

Going Multimodal

To boost demand in other markets, like Latin America and India, Kiwi might — assuming its funding round closes the way it hopes — acquire local agencies that have existing relationships with airline suppliers and existing preferred payment methods, like installment payments, set up with widely used local banks.

To stay a step ahead of larger rivals, Kiwi has already been investing in multimodal, meaning the mixing of different types of transport, into its search results. It increasingly offers to combine inter-city bus rides and other ground transportation with flights, again providing a product combination not available — yet — on the legacy online travel brands.

One could see it possibly acquire a multimodal expert, such as Rome2Rio, KelBillet/Gopili, or RouteRank. (GoEuro is too expensive.)

Partner, Partner, Partner

Kiwi may only have a lead for a little while longer in having a segment of content that tech titans generally don’t yet — flights on low-cost carriers like Ryanair combined with flights on legacy airlines.

However, it’s trying to leverage that lead in as many ways as it can through business-to-business partnerships.

In a plan set for next summer, London’s Stansted Airport will rearrange its procedural flows so that travelers booking virtual interlined flights will not have to re-check in for their onward flight.

The airport will also assist with baggage transfer as if a formal code-share or interline agreement existed between passengers. Without formal deals between the carriers, for example, checked luggage isn’t seamlessly passed through on Kiwi’s typical self-transfer itineraries, and travelers must check in and check their bags for each leg. Stansted will remove that obstacle.

Kiwi will provide its technology to airline brand.com websites on a white-label basis to encourage more mixed itineraries. It will also offer phone and online customer support in case things go wrong. If the plan works, other airports worldwide that are secondary, or non-hub airports, may also want to partner to try to compete for so-called feeder traffic.

One could see Kiwi partnering with, and maybe even buying, one of a few startups that offer to help travelers store their bags at locations, such as Stasher (formerly CityStasher) and LuggageHero.

Packaging It Up

Besides offering traditional affiliate sales, Kiwi has also taken its — for now, at least — rare inventory and repurposed it for bundling with hotels and other travel content via business-to-business partnerships run by German dynamic packaging technology distributor Peakwork.

In one sample partnership, since earlier this year, one of Spain’s largest homegrown online travel agencies, Logitravel, has been adding Kiwi’s flight content to its lodging content to sell bundles to its customers.

To get long-distance, inter-city bus content, one could see a someday possibly freshly capitalized Kiwi investing or buying a SoBus, SaveABus, BusBud, CheckMyBus, or similar startup.

Take Wild Risks

Kiwi isn’t an obvious domain name for a company that’s based in Europe, not New Zealand, and that sells travel, not fruit. In 2016, it was even less evidently a smart domain to buy because it cost $800,000. No self-respecting startup mentor would have recommended a tiny startup — then called Skypicker and with little revenue — spend that much on a domain name.

Yet the risky move paid off. The name is pronounceable in a wide variety of languages. It’s short enough to remember, and it’s easy to spell.

The company has taken other calculated risks.

This summer Kiwi introduced a multi-city optimization tool. When a person is interested in stopping in multiple destinations for extended stopovers but isn’t sure which order will be best, Kiwi will shuffle those stops to arrive at the least expensive itinerary it can calculate. Think a roundtrip flight from Prague to London, with stops in Paris, Rome, and Stockholm for only about $160.

Legacy search sites don’t yet offer this. Skeptics could argue that it’s a gimmick. For a startup racing to grow up before a larger company either kills or absorbs it, working on such projects risks a diluted effort that can ultimately end in the company being roadkill.

Will Oliver Dlouhý, CEO and co-founder, and Jozef Kepesi, chief technology officer and co-founder, and the rest of Kiwi defy the startup odds? Will new investors bite? Will it thrive, go public, or be acquired? Expect the handicapping to continue.

Photo Credit: Shown here is a conference room in the 92,600 square feet headquarters for online travel agency Kiwi in Brno, Czech Republic. The company is rumored to be closing a funding round. Kiwi