Expect other travel tech players to pick up promising startups at a discount during the pandemic.
Companies spent $1.4 trillion on business travel in the year before the pandemic, and road warriors inflated some of that spending by being careless with their bosses’ money. But once business travel rebounds, supervisors may keep a closer eye on travel accounts.
That’s the thinking of Mondee, a travel tech company in Foster City, California, which said Wednesday it had bought Rocketrip, a New York City-based startup that incentivizes employees at companies such as iHeartMedia, Feld Entertainment, and Twitter, to restrain their business travel spending in exchange for rewards.
The companies didn’t reveal terms of the transaction. Mondee has in the past year received investment from TCW Group, an asset management firm.
The sale gave a safe landing for Rocketrip in a year when the business travel sector is in tatters. Rocketrip will stay a standalone brand serving enterprise customers, said Prasad Gundumogula, CEO of Mondee.
Rocketrip’s cash-plus-equity sale likely represented a rocky landing for most of its investors. The startup raised about $32 million from venture capital firms such as Bessemer, Canaan, Genacast, and GV (Google Ventures). It’s unlikely that its sale to Mondee returned a significant multiple on that capital, given the revenue crisis in corporate travel today.
Rocketrip, which in 2013 came out of the famous Y Combinator startup incubator as a travel booking platform and later pivoted to a service that syncs with corporate booking tools and has typically relied on a browser extension for bookings, last announced fundraising in 2018, when it raised a $15 million Series C round.
Mondee’s Plans for Rocketrip
Mondee has a footprint in many parts of the globe, which could benefit Rocketrip as it expands beyond the U.S.
“One synergy is Mondee’s business processing and outsourcing solutions,” said Dan Ruch, the founder and CEO of Rocketrip.
“One reason we haven’t internationalized our business much outside of the U.S. is we needed to invest in a structure to support that,” Ruch said. “Now, we don’t need to worry about 24/7 support for our customers because Mondee already has that in place.”
Mondee serves about 45,000 enterprise customers, a quarter of whom are ethnic travel agencies who provide a third of its revenue. Mondee mainly serves mainstream agents and multi-office agencies for leisure and corporate travel and providers of managed corporate travel technology and service solutions. Its growth product is a technology platform, TripPro, which agencies use for their operations.
On the corporate side, Mondee also owns TripPlanet, a set of tech solutions, including a corporate booking tool, that aims to help small-to-medium-sized businesses handle their travel without the help of an agency. The tool can be a platform for travel management companies, too. Mondee will add Rocketrip’s behavioral rewards offering to this software suite.
Rocketrip syncs with roughly a few dozen partners in the enterprise space, including the online corporate booking tools Sabre’s GetThere and SAP’s Concur and expense management services like Concur and Expensify.
Other business travel startups have had to sail turbulent waters. TripActions has added “bleisure” bookings to try to broaden its mix. Lola went into the crisis on the strength of a partnership with the giant travel management company American Express Global Business Travel. Upside entered the crisis having won strategic investment from Flight Centre Travel Group. For more context on Mondee, read our story earlier this year on the company.
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Photo credit: An image of a traveler staying at lodging that's part of the Airbnb for Work program. Business travel is set to rebound as the pandemic wanes, and Mondee, a travel tech company, has bought Rocketrip, a New York City-based startup that incentivizes employees to restrain their business travel spending. Airbnb