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Each week we round up travel startups that have recently received or announced funding. Please email Travel Tech Editor Sean O'Neill at email@example.com if you have funding news.
This week, travel startups announced more than $140 million in funding.
Skift reported on Monday that RedDoorz, a Singapore-based budget hotel brand, said it had raised $70 million in fresh funding. Asia Partners led the latest round. RedDoorz raised $45 million last month.
We also reported on Monday that Groups360, a company with an online booking tool for the meeting planning industry, said that Accor, Hilton, IHG (InterContinental Hotels Group), and Marriott had invested an undisclosed amount in it.
Moreover we reported last Thursday that Standard International subsidiary One Night had received an unspecified investment from SWaN and Legend Venture Partners to support the launch of a recommendations-based site and app for travelers. Hotel guests will earn commissions by recommending to their friends that they should stay at Standard International properties and any of One Night’s other listed independent hotels.
>>Zhiketong, a Beijing-based provider of direct marketing services for upscale hotels using WeChat, has secured $42.5 million (300 million yuan) in a Series C funding round.
China CYTS Tours, one of the three largest tour companies in China, led the Series C round of funding. Sequoia Capital China, IDG Capital, Shunwei Capital Partners, and Vision Plus Capital participated too.
In June Zhiketong raised a $16 million (110 million yuan) Series B round with participation by Gobi Partners, Lightspeed China Partners, and Shunwei Capital.
Today thousands of upscale hotels and other companies use the startup’s services to maximize direct sales via WeChat, a combination of a social messaging and payment platform. Hotels like WeChat because it’s a cheaper alternative to using online travel agencies like Ctrip.
Hotels and other companies can use Zhiketong to establish a WeChat official store and receive operational support, tools for managing what rates and inventory they offer, help with planning and delivering advertising campaigns, and statistical analysis of customer data.
China CYTS Tours plans to use the startup’s services to help promote direct, repeat visitors to its sites, such as Gubei WTown, an Instagrammable replica “ancient town” built in 2010 near part of the Great Wall.
CEO Liu Hua founded the startup in 2014 along with two other fellow alumni of eLong, an online travel company.
>>Cosi, a new Berlin-based hospitality startup, has raised $5.5 million (€5 million) in seed funding.
Cherry Ventures and e.ventures led the round. Angel investors include Nils Regge, the founder of HomeToGo, and Gleb Tritus, the managing director of Lufthansa Innovation Hub.
The service launches later this year. The company plans to offer an alternative to boutique hotels and managed short-stay apartments.
Like Sonder, the company plans to offer end-to-end self-built technology to run operations instead of outsource their tech to third parties. It signs leases with property owners and then designs the interiors and rents the apartments as hotel substitutes.
>>TravelLocal, an online travel agent that links travelers with local tour operators around the world to build exotic vacations, revealed it recently raised more funding.
Channel 4, the British broadcaster, invested via its commercial growth fund. Along with their existing investment from Active Partners and Gresham House Ventures, this brings their total funding to date to $9.9 million (£8 million).
The Bristol, UK-based company was founded in 2016 by joint managing directors Huw Owen and Tom Stapleton.
>>PTO Exchange, a service that offers employers more flexible ways to compensate their workers for unused time off, has raised a $3 million seed round.
WestRiver Group, a collective of investment funds based in Kirkland, Washington, led the round.
Workers can trade their unused vacation time for cash, contribute to a retirement or health savings account, or donate vacation time to a colleague who needs extra time off via the company’s software. PTO Exchange launched in 2013 in Woodinville, Washington, which is near Seattle. The software costs companies about $3 an employee a month, plus a fee of between 3 and 5 percent per employee payout.
>>Frontdesk, a vacation rental brand that manages 270 suites in 13 U.S. cities, has closed a $2.75 million bridge round of financing.
Bill La Macchia, who founded The Mark Travel Corp, which held brands like Funjet Vacations and Southwest Vacations, led the round. Sand Hill Angels and Motivate Ventures participated too.
The Milwaukee-based company doubled its city and unit count since the start of the year, said Jesse DePinto, Frontdesk co-founder and chief growth officer. About 29,000 guests have stayed in its properties to date. It plans to have 500 suites open by year-end.
>>OpenSparkz, a fintech startup, has raised $2.5 million in seed funding.
Louise Daley, deputy chief of Accor Hotels Asia Pacific, and EFT Solutions participated, along with other angel investors.
The company, founded in Australia in 2016, aims to take some of the steps out of a consumer’s process in earning and then redeeming points earned in loyalty programs. It has participated in Mastercard’s Start Path incubator program.
>>ClaimCompass, a service for helping travelers recover money they are owed for canceled flights and similar disruptions, has raised $1.3 million in its latest round of funding.
The Bulgarian company has processed more than 150,000 claims for compensation since its founding in 2015 by CEO Tatyana Mitkova, Chief Technology Officer Velizar Shulev, and Chief Marketing Officer Alexander Sumin.
The startup graduated from the 500 Startups accelerator. In 2017 the company raised an undisclosed round from Social Capital, Hustle Fund, and David Houser. Today existing investors are joined by Rambleside, Telegraph Hill Ventures, Good News Ventures, Global Edge, Ramen Ventures, and others.
For context on the market for such services, see our June story Airlines Reluctantly Adapt to Reimbursing Travelers for Flight Disruptions.
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.