Travel bookings will get worse before they get better. But we found a half dozen French travel startups defying the odds. They appear to be setting themselves up well for the post-crisis rebound. Bonne chance!
France banned travel to and from countries outside of the European Union on January 31 in an effort to contain the coronavirus pandemic. The news clouded predictions about how soon and how fast travel bookings would rebound.
Yet despite the gloom, a handful of French travel startups have adapted well to the crisis. Explora Project, Evaneos, Cirkwi, Cocoonr, MagicStay, and Koala appear to be in strong positions to grow as the pandemic dissipates.
Several factors may make France a fertile ground for travel tech innovation.
“We have more international tourist arrivals than any other country, according to the WTO,” said Caroline LeBoucher, CEO of Atout France, the tourism development agency. “We’re ranked as having one of the most competitive tourism industries by the World Economic Forum. We had the first major recovery program for startups.”
“President Macron has a very strong commitment to innovation with the development of the French Tech effort for startups, which connects entrepreneurs to financial and mentoring help,” LeBoucher said. Last year, La French Tech’s index of 120 fast-rising startups included 10 French travel startups.
To be sure, the latest French travel restrictions gave a jolt to many French travel startups managing their cash flows. While startup founders stereotypically seek to “move fast and break things,” many must continue to conserve cash to survive the latest falloff in travel bookings. Founders are minimizing every last euro of spending on payroll and marketing.
Travel startups are playing for time. France should complete mass vaccinations of people over age 60 soon. President Emmanuel Macron promised this week in a TV interview with TF1 that all French adults who wanted would be inoculated “by the end of the summer.”
Covid-19 has so far been a virus that spares most people under age 60. So experts believe death rates will drop in France and in other countries with mass testing and mass vaccination, inspiring confidence in consumers to start booking trips. Some cities in some countries, such as India, might be achieving so-called herd immunity — though the reports remains controversial.
Yet international long-haul travel may not recover until 2023. One wild card factor in forecasting a recovery is the rise of so-called mutant strains of the coronavirus, including a version of Covid-19 discovered in Brazil that some scientists worry could undermine today’s version of vaccines, according to the medical journal The Lancet. Yet one vaccine maker, Moderna, expressed cautious hope it could find workarounds, though a timeline is unknown.
Another wild card factor is that about one out of four survey respondents in France, Germany, and the U.S. said in polls released this week that they might refuse to take a coronavirus vaccine.
Yet entrepreneurs have optimistic personalities, given that founding a startup is a quest against the odds. So here are stories of several promising French travel startups braving the crisis. Perhaps one will someday grow as large as France’s giant venture-backed ridesharing app, BlaBlaCar
Explora Project Sees Resilience in Outdoor Tourism
Explora Project is focused on small group, environmentally sustainable adventure tourism. Based in Annecy, France, the travel startup has hired 120 freelance guides that run adventure tours for small groups. Consumers book the tours via its site. The guides run the tours under the startup’s branding and guidelines.
“We launched and had only four months of sales in late 2019,” said CEO Stanislas Gruau. “So we essentially took Covid in the face right from the beginning.”
Yet many young travelers were willing to take vetted outdoor trips in small groups of people who had negative coronavirus tests. In June 2020, Gruau and his co-founder, Alix Gauthier, raised $2 million (€1.7 million) in seed funding on the strength of the company’s resilience in the crisis.
For the full year of 2020, the company generated sales of about $1 million (€1.45 million) on 250 expeditions in eight countries.
“We don’t fight for keywords or bid in ad auctions to rank first for searches on ‘adventure travel,'” said Explora Project CEO Stanislas Gruau. “Google is for the old generation. Who is typing ‘adventure travel’ on Google to find something cool? Seriously: no one.”
Promotion on social channels like Instagram has brought in business. On March 9, 2020, the company had only 1,000 “members,” or people who signed up for communications. Today it has more than 100,000.
Gruau is betting on rising interest in sustainable tourism. In July, the company hired someone with a Ph.D. in mathematics to measure as precisely as possible the carbon emissions generated by the company’s expeditions, including the trip to arrive at a destination. Many itineraries substitute meat-free diets for meat-based ones believed to produce more greenhouse gases.
“We are creating scores on a scale of one to five about the environmental impact of our trips,” Gruau said. “Some have low impact. Others will have more impact, meaning that if you want to respect the Paris Agreement, you’ll only be able to do one of those trips every couple of years.”
“We offer some packages involving flights,” Gruau said. “We are not ayatollahs of plane-free travel because we have to be pragmatic. But most of our expeditions involve short-distances and can be reached by rail or bus.”
Evaneos Bets on Responsible Travel
Evaneos, a Paris-based tour booking startup, faced a different challenge. In 2018, Evaneos raised $80 million in a Series A round. After operating for nearly a decade, the founders decided to use external funding to scale up quickly. It took funding from venture capitalists, who had more money than usual thanks to years of low interest rates.
Then the pandemic hit.
“Since the beginning of the crisis, we have secured financing, temporarily cut some costs, and benefited from French government help,” said CEO Eric La Bonnardière. “Today, Evaneos is in good health despite the incredible year it went through. While the moment of business rebound is uncertain, we are here for the long-term.”
Evaneos helps “thousands” of local agents based in more than 160 destinations sell customized, multi-day trips to consumers. Its pitch is that it saves both consumers and suppliers money by cutting out the typical middleman layer of tour operator giants and advertising platforms.
“We have listened a lot to our travelers this year, and it appears that they will want to get off the beaten track, discover the world in an even more authentic way, avoid large groups and understand the meaning and impact of their travels,” La Bonnardière said.
“So we are working at the moment with our community of local agents to adapt our offers, to make our online trip planning tools more sophisticated, and to be more efficient with new tools. This crisis is just accelerating a market evolution toward more online customization,” La Bonnardière said.
Evaneos was among the forerunners in creating an online offer of customized travel, taking market share from the traditional sellers of holiday packages, such as Thomas Cook, whose core business collapsed in 2019.
Evaneos, a marketplace connecting travelers with local experts to plan trips, claims to be the most used European customized multi-day tours platform. But Evaneos has some competitors in the online sector, more broadly speaking. Tourlane, a tour operator, appears quite strong with German-speaking travelers.
Like Explora Project, Evaneos expects booming growth in sustainably-themed travel as the crisis ebbs.
“People will probably travel long haul less often but for a longer time and favor close destinations more regularly,” La Bonnardière said. “We are adapting our offer to this trend. We’ve done well already, but we need to bring our network a step further along in terms of sustainability. We need to redistribute tourism revenues with the destination better and also redistribute better the flow of tourists in the world. We are in the process of being B-Corp certified.”
La Bonnardière also believes that destinations will increasingly want to promote more “responsible tourism” and avoid overtourism after the crisis. For context, see Skift’s earlier story Lessons From a Tourism Pushback in Hawaii.
Sylvain Caucheteux and Benoit Milan are co-CEOs of Cirkwi, a travel tech startup they founded in 2011 in Nancy, France. Before the crisis, Cirkwi focused on providing digital tools to create, distribute, and promote touristic itineraries for points of interest in France, Belgium, Switzerland, and bordering countries.
Before the crisis, it had amassed 2,000 customers for its business-to-business service. More than 800 tourism promotion websites, many lodging providers, and about 15 specialized digital agencies integrated its content.
Cirkwi maintained most of these customers in 2020.
“We’ve had a stable business volume despite the pandemic thanks to our software-as-a-service, B2B model that serves many publicly-owned customers and has an emphasis on local and regional tourism promotion,” Caucheteux said.
In March 2020, just as the crisis hit its first peak, Cirkwi joined (in a remote manner) Welcome City Lab, a Paris-based incubator dedicated to the tourism sector.
The founders Caucheteux and Milan adjusted their ambition to make Cirkwi the reference hub for tourism marketing content. They planned to offer its products to any touristic professional or media company worldwide, not just publicly supported ones in a few countries.
“We realized gathering any country’s touristic dataflow is time-consuming, and therefore leads us to a hardly scalable model,” Caucheteux said. “That is why we moved to seek other data sources, creating our own web search engine that analyzes and indexes millions of structured touristic data and web pages to find additional insight.”
During the first French lockdown, Cirkwi developed a new product called Storyguide, a tool to enable everyone to virtually travel from their own couch.
“We created travel guides that looked like image carousels,” Caucheteux said. “These storyguides are automatically created for 3.5 million points of interest through our algorithms. We already have 22,000 storyguides based on a significant amount of touristic data.”
Companies and organizations can add the widget to their websites and apps with just a few lines of code.
As far as its target market is concerned, Cirkwi expanded its customer base. The startup added tools for the hospitality sector in October 2020. It onboarded nearly 250 hotels in France since then.
Later this month, the startup will roll out more customer administration tools to automate its lead generation, sales, and onboarding. It plans to hire 11 people this year.
“We are determined to test the North American market by the summer,” Caucheteux said. “Our new product suite might generate the majority of our revenue next year.”
MagicStay Embraces Consumers
MagicStay targeted the business and corporate travel market from its founding in 2013 in Grasse, France. It helped companies find mid-term and long-term corporate housing for employees, though it doesn’t run or manage the properties.
By 2019 the company had signed up a quarter of French companies, said CEO Valéry Linÿer. A key driver of its success was that it built online booking tools that made it easier for companies to handle such long-term assignments. The software companies use to manage short-term business travel generally isn’t set up to handle long-term stays, a gap that MagicStay has attempted to fill.
Then came the coronavirus. So MagicStay added a new product, short-term rental bookings for consumers. While its website still talks about its business services, the company opened up its listings and customer service to handle consumers. The move was good for supply. The company doubled its inventory in 2020 to 1 million apartment listings worldwide.
After the crisis ends, Linÿer expects MagicStay’s original offering to have enhanced appeal, as extra-cautious companies will be extra-mindful that employees are staying in properties that comply with corporate travel policies. It also works with all the travel risk mitigation and security companies like International SOS, SSF, and WorldAware.
MagicStay has raised about $9.5 million (€8 million) since its founding. It doesn’t relist property on other sites, such as Airbnb, but it does use Google paid marketing to attract visitors.
“If you go to Google and type in ‘short term rentals in London,’ you will see MagicStay high up in the search results,” Linÿer said. “We have good conversion because our properties are all professionally managed and vetted to take pandemic-related safety precautions.”
Cocoon Survives on Short-Term Rentals
Cocoonr last month defied trends by being one of the only European travel startups to receive venture capital funding during the crisis.
Just as Airbnb benefited from a boom in apartment rental bookings once travel restrictions eased, so did Cocoonr, which manages short-term and medium-term rentals, including rental apartments, vacation homes, and villas and chalets, under the Cocoonr and Book&Pay brands.
The Rennes-based company raised $1.21 million (€1 million) from angel investors including George Sampeur, who chaired the B&B Hotel group for 15 years. Founded in 2015, Cocoonr had previously raised about $1.6 million (€1.3 million).
The company has 35 employees and eight agencies throughout France. Despite the crisis, the company added operations this year in Bordeaux, Toulouse, Nantes, and Marseille.
Cocoonr is the rare travel startup to report revenue growth in 2020.
Koala Bets on a Travel Insurance Sales Boom
Koala, a French insurance tech startup, closed in June a $1.9 million (€1.6 million) seed round, which included angel investors who are former CEOs of Air Malta or Brussels Airlines.
As the pandemic prompts travelers to hunt for more flexible travel insurance policies, Koala is building exactly that. Its travel insurance lets consumers cancel a trip without justification or motive, a rare offer in the industry.
Founded in Paris in 2018, the company launched its first product for flight insurance at the start of 2020. The policy compensates travelers for delayed or canceled flights.
In December, Koala launched a service that allows a traveler to cancel their trip for any reason in just a few clicks online without providing any documentation, said CEO Ugo Weyl. The first travel agency to start offering it is Ulysse, a Paris based online travel agency that’s also venture-backed. For more on this sector, read Travel Insurance Sales Could Be Supercharged Once Vacationers Return.
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Photo credit: Esplanade de La Défense in Paris. Jacques Lebar / Paris Tourist Office