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Five months and $1.2 million in seed funding later, Singapore-based Travelstop, which aims to disrupt the huge corporate travel management space in Asia, is rolling out local versions of its platform this week in seven languages in Indonesia, Thailand, Hong Kong, Taiwan, Japan, South Korea and Vietnam.
Competition in the sector in the region is only beginning, and the startup sees the ability to offer a localized product as key to become a dominant disrupter.
Asia’s corporate travel management space is ripe for a shakeup. The reasons are not dissimilar to those in North America and Europe, where startups such as Palo Alto-based TripActions and Barcelona-based TravelPerk have jumped in to try and streamline cumbersome and complex ways of managing business travel booking and expenses, and raised millions of funds in the process.
A handful of entrepreneurs in Asia-Pacific are having a go at it. Besides Travelstop, there’s Baoku in China, Tripeur in India, and Corporate Travel Management in Australia. In Southeast Asia, Travelstop, based in Singapore, is believed to be the only tech-focused corporate travel startup there to date.
The company is led by its CEO Prashant Kirtane, chief technology officer Vijay Aggarwal, and chief product officer Altaf Dhamani, ex-Yahoo! engineers who later launched Travelmob, which was fully acquired by HomeAway in 2015.
After rebranding and leading HomeAway’s expansion in Asia for two years, they left HomeAway and set up Travelstop in August.
More than 90 percent of Asia-Pacific’s business travel spend is unmanaged in that it is not bound by preferred suppliers, and tools, formal policies and compliance, Kirtane told Skift, compared with 69 percent in the United States.
“The Asia-Pacific region is the largest business travel market in the world, comprising 40 percent of global business travel,” said Kirtane. “Asia is on track for strong growth in business travel, expected at 10.4 per cent CAGR between 2015 and 2023, compared with 3.8 percent in Europe and 4.1 percent in the U.S.”
Business travel expenditure in the region is a third of the $1 trillion global amount annually, and growing, added Kirtane.
“By 2025, business travel spending in Asia-Pacific will more than double and will make up half of the global total, forecasts by Amadeus show. Trade within the region is a key driver of this growth,” Kirtane said.
A startup selling to other startups
While that all looks good, it also reflects the continuing challenges in transporting a borrowed western concept to Asia. Like the U.S. concept of incentive travel in its early days in Asia, business travel management is still unknown or alien to the region.
Big western brands such as Egencia and Concur, along with the region’s corporate travel agencies, have been pounding the streets in Asia exhorting the value of business travel management for over a decade. Yet, as Kirtane said, 90 percent of the business travel spend is still unmanaged.
While the big players have managed to crack the multinationals or the larger regional companies that understand the need for travel policy and compliance, a large chunk of the market still comprises fragmented, small and medium-size enterprises that are quite happy to have the managing director’s secretary and/or the human resource manager handle travel bookings with a semblance of expense monitoring.
So why does Kirtane think he can pry open a larger pie, when others before him are finding that it’s a one step forward, two steps back?
Kirtane points out that the business travel market in Asia has changed. There are now lots of high-growth, mid-size technology-driven companies that can relate to another technology startup such as Travelstop.
“These startups are growing from 200 to 500 staff, many of them now having to travel, and the companies are only thinking about how to manage their travel expenses.
“Currently, business travel management tools are expensive for them. It takes 75 to 90 days to onboard the companies. The first question in the negotiation [between the travel management company and the client] is, what is your travel budget? Anything less than $25,000 per month — they are not interested.”
Travelstop charges $10 per active user per month, on-boarding takes minutes and the platform is easy to use and intuitive, he said.
“We are 100 per cent self-serve and machine-learning platform and corporates and employees can on-board themselves in matter of minutes. We support most of the Asian languages, currencies, merchants and we are focused deeply in providing the best possible travel booking options for business travelers in Asia,” said Kirtane.
Of course, only Travelstop’s clients would be able to weigh in on whether these pledges are based on reality.
New features added after beta test
So rather than focus on the large companies, Travelstop reached out to startups in four initial Southeast Asian cities, Singapore, Kuala Lumpur, Jakarta and Bangkok, in the first five months of inception.
“Our target wasn’t to get as many companies to join us. It was for 75 percent of the business travel booking and reporting to be done on our platform,” said Kirtane. “Once you’ve built a product that solves all their problems, afterwards it’s just marketing in order to get sales.”
The beta test brought forth new insights, for example, the fact that a lot of CEOs and CFOs do not intend to book travel by themselves. Thus a Book for Others feature has been added.
Other new features, launching at the same time as the seven local versions, include a way to address compliance where, once set up, bookings that are outside of travel policies are automatically flagged during the booking process.
Also, given that Asia is mobile-first, Travelstop has released its iPhone app to help users access their trip information and manage their business expenses on-the-go. An Android version will be released in the next few months.
Startups that are now using Travelstop include affordable accommodation platform RedDoorz and peer-to-peer financing platform, Funding Societies, both based in Singapore.
Said RedDoorz’s founder and CEO, Amit Saberwal, “Before, our company’s business travel [management] was handled in a decentralized matter. It was very painful to control. There wasn’t any other option for small businesses like ours until Travelstop came along. Concur, Egencia and the like are all for the big boys.”
But the business is global. Travelperk, for instance, already has clients in Singapore and is understood to be planning further expansion outside its European home ground.
Said Kirtane, “Competition is always good as it helps to broaden the category awareness but to win in Asia you have to be deeply rooted in Asia which we are.
“We have the technical ability and experience to build a platform that caters to the needs of Asian users.”
Besides local languages and currencies, Travelstop also offers support for regional tax differences, reporting formats, payment options, and eventually plans to introduce customer service to its users in local languages.
It claims to have the largest selection of flights in the region, with over 800 carriers, including most regional and low-cost carriers.
Travelstop’s seed round was led by Singapore-based venture capital firm SeedPlus and angel investors including former Expedia senior executives Dan Lynn and Vikram Malhi; president and COO of Rally Health David Ko, and regional operations director at Hyper Island Singapore, Jarrod Howe.