U.S. private-equity firm General Atlantic has agreed to invest an undisclosed sum in Kiwi.com, a travel tech startup whose flagship product is selling cheap airplane tickets. The deal, announced Monday, is the latest sign investors see opportunity in the online travel sector.

The investment buys out past equity investors and makes General Atlantic the majority owner of Kiwi.com, a startup that launched in 2012.

“We intend to show the world we’re something bigger than an OTA [online travel agency] and to transform our product into something that goes beyond the standard OTA capabilities,” said CEO Oliver Dlouhý.

Co-founders Dlouhý and chief technology officer Jozef Képesi will remain significant shareholders. The board will shortly consist of members from the management, General Atlantic, and some independent members.

One source estimated General Atlantic’s investment at about $125 million, but Skift couldn’t confirm that.

General Atlantic has been a major investor focusing on companies with the potential for strong growth. In 2015 it was one of the firms that led a $1.5 billion investment in Airbnb. Other investments in the online travel industry included Priceline, Despegar, Mafengwo, Meituan, and Uber.

“This startup’s ability to attract a large investor like General Atlantic goes to show that there is still room for new players in the crowded online travel booking space,” said Skift Senior Research Analyst Seth Borko. “Kiwi.com grew partly by offering a differentiated product and partly by developing a strong presence in one region first.”

Kiwi.com said it has taken only about $1.7 million (€1.5 million) in equity investment from a handful of angel investors and small venture firms. It processed more than $1 billion in gross bookings last year, it said.

“The company has become a significant player in the European airline market,” said Ann Cederhall, a London-based senior strategic consultant in aviation tech.

Ruffling Feathers

Kiwi.com, based in Brno, Czech Republic, generates most of its revenue today as an online travel agency for flights. It typically combines flight segments from low-cost carriers with ones on traditional airlines. Think: flying EasyJet partway to your destination and Iberia the last leg.

The practice sometimes involves so-called “throwaway tickets.” As Skift reported earlier this year, on some routes, carriers may charge more for a one-way fare than a round-trip one. Kiwi.com is rare among online travel companies to buy the round-trip but only assign the one-way to a customer, who often may not know they’re breaking airline rules. Some airlines are becoming annoyed with the company’s practice.

“I’ve heard many times that we’re breaking airline rules, which were imposed decades ago for profit maximization for legacy players,” said Dlouhý. “But we are using technology to bring transparency to the market.”

Executives at two mid-size European airlines said privately in recent months that they like how Kiwi.com cuts deals that bypass the more expensive services of third-party distribution companies, called global distribution systems.

Other tech companies provide technology to airlines to sell each other’s fares and products. Dohop, a price-comparison site and tech firm in Reykjavik, powers cross-selling for EasyJet and other airlines. Tech firm Air Black Box, lets several airlines cross-sell their flights, too. Those companies offer to comply with carrier rules.

In May, Eurowings launched a platform that links Eurowings flights with offers from other airlines even when there is no cooperation. Lufthansa Innovation Hub, the central digitization unit of parent company Lufthansa Group, tapped tech vendor Dohop to help with the effort.

“What makes us particularly bullish on Kiwi and similar providers like Dohop is the underlying meta trend of virtual interlining, which for us, is one of the potential major game changers within travel tech,” said Lennart Dobravsky, director trend and market intelligence at Lufthansa Innovation Hub.

Beyond Air

Kiwi — which Skift named as one of the top travel startups to watch last year — is now selling more than just air tickets.

“We are integrating a lot of European rail carriers and intercity bus operators,” said Dlouhý. “We’re also adding Greyhound and Amtrak in the U.S. as part of a worldwide expansion. Our partners will soon be able to offer that via our API [application programming interfaces, or methods of exchanging data].”

Kiwi.com has partly gained share by offering customer service to help rebook a traveler in the event of a trip disruption.

Combining different types of products, such as flights, rail, and bus, and providing customer support from end-to-end is a move that could unlock a lot of value for the travel industry.

“Airlines, agencies, and their tech vendors could take inspiration from how a few aggregators are combining all elements of a passenger journey,” said Cederhall. “It’s what travelers want.”

Photo Credit: A view of a common area at the offices of travel tech company Kiwi.com, which is located in a business park in the suburbs of Brno and was designed by Kaplan Architects. General Atlantic, a private equity firm, has taken majority control of the company. Kiwi.com