TripActions now claims to be worth $4 billion after raising nearly half a billion dollars. Raising so much money in such a short time raises questions about competition in the space as it works to scale more quickly than its rivals.
Business travel is big money, and venture capital continues to rush into the travel management space as new players jockey to dominate the market for small- to medium-sized businesses.
TripActions has raised an additional $250 million in Series D funding, bringing its total amount raised to $481.5 million since the company was founded in 2015. Existing investors Andreessen Horowitz, Zeev Ventures, Lightspeed Venture Partners, and Group 11 led the round. The company now values itself at $4 billion, up from $1 billion when it raised money last time.
Its Series C, a $154 million round, has been spent to help the company scale globally and build out its traveler support team. The team has been busy building partnerships with providers of expense and human resources software and recently launched a direct connect with United Airlines to bring new distribution capability powered shopping to its customers.
Expanding globally means opening offices around the world and staffing up, a costly endeavor for a company fighting against incumbent competitors in every market. TripActions faces competition from a variety of players at it scales, in fact. Europe’s Travelperk, which has focused on serving Europe instead of expanding globally, is its most well-capitalized rival. Others like Lola and Upside have been growing more slowly but have partnered with legacy travel management companies to expand their reach.
“My goal and Ilan’s goal is to grow as fast as we can, and we have big plans regarding our global expansion,” said TripActions CEO Ariel Cohen, explaining that the startup launched these plans about three months ago. “We recently started to do some sales in Australia, and we won our first accounts there. We’ve also started to sell in London and Barcelona.”
Large global travel management companies like American Express Global Business Travel tend to serve larger customers but have moved to target the lower end of the market as companies like TripActions have emerged in recent years.
There is also the matter of its booking tool, which often surfaces more expensive hotel and air rates than travelers can find by shopping around. Much of its content is also sourced from online travel agencies, leading to confusion about which channel a traveler should actually book through as well as difficulties servicing a booking if something goes wrong. Other emerging travel management companies have similar issues.
For now, all eyes will be on TripActions to see if they can truly scale on a global basis. They certainly have the war chest to do it, but landing customers and avoiding churn in a dynamic marketplace will make it difficult.
Editor’s Note: Skift uses TripActions’ travel management software.
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Photo credit: Tripactions CEO Ariel Cohen, left, with chief technology officer Ilan Twig. TripActions