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Barcelona-based travel management platform TravelPerk has just raised $160 million, which almost doubles its previous rounds combined. Meanwhile, Silicon Valley’s TripActions secured $155 million in January.
However, TravelPerk’s chief commercial officer sees opposite paths emerging, even as the gap widens between the pair and other platforms.
“Now, pretty clearly, there’s a big difference between us two and the rest of the business travel management market,” claimed Jean-Christophe Taunay-Bucalo. “There is honestly no debate that TripActions and us are in another category compared with the rest.”
Where Will the Money Go?
Both companies do appear to have different intents. TravelPerk, for one, is coming to America.
A “very significant” part of the new $160 million funding will be deployed in the U.S. as it goes after winning small and mid-size businesses. This expansion will be on top of its acquisition of Santa Monica-based NexTravel in January, and more acquisitions are highly likely.
It’s a marked difference to TripActions’ European invasion, as it goes after enterprise-sized customers. “We’re alone in this market, because TripActions has taken the high end of the market. We want to double down on this gigantic market in the U.S.,” Taunay-Bucalo said.
He added that 75 percent of its customers didn’t have a solution before, so thinks there’s room to grow. But one consultant believes TravelPerk will likely want to snatch clients off the larger agencies, especially those companies that are either nervous about the financial health of their current providers, or simply want to scale down due to smaller travel programs in the future.
“This is a significant bet less about the growth of business travel and more about TravelPerk’s ability to take share from traditional travel management companies, and convert unmanaged travel to its managed platform,” said Scott Gillespie, CEO of consultancy tClara. “And surely part of this round’s raise will be earmarked for acquiring agencies in the U.S, and Europe.”
Another avenue will be product development, and there are three areas TravelPerk wants to hone in on: safety, sustainability and flexibility. But in reality, it’s already covered these bases, via TravelSafe (after buying risk management startup Albatross in 2020), GreenPerk and FlexiPerk.
“We’ve done a good job, but we want to go much deeper. In this moment of recovery, everybody’s trying to be safe, and they need to feel safe. There’s still a ton of stuff to do,” Taunay-Bucalo said.
A lot of innovation is still to come around sustainable travel as well, he added, with GreenPerk to be expanded: “That’s where we believe the market will head in the coming years.”
One area it won’t invest in is expense technology, even though it’s proved a popular path for many corporate travel agencies during the pandemic, partly to offset the lack of commission and other revenue from selling travel. TravelPerk won’t stray down that path though.
“We don’t want to go into expense the way TripActions has, because there are a ton of fantastic expense solutions around the world. We want to go about it through partnerships,” said Taunay-Bucalo, echoing Locomote’s own view. “In Europe, you have one expense management solution per market, because you have different legislations. If you do one solution, you’re not going to be very flexible. We see the world as being an open platform.”
A Long Term Opportunity
The round was led by Greyhound Capital, a new investor, with participation from existing investors, and brings the total investment raised to date to $294 million.
Taunay-Bucalo said the venture capital company tended to make investments that lasted five to 10 years, and that this wasn’t a case of making a quick return.
“There is no doubt that from 2021 onwards the average business trip will look very different to how it did in 2019,” said Pogos Saiadian, partner at Greyhound Capital. “We are confident that business travel will recover and thrive in the years ahead … this is a huge long-term opportunity, and as customers ourselves, we see first-hand the tremendous value that TravelPerk provides across organizations, from finance to admin and the travelers themselves.”
Taunay-Bucalo said TravelPerk could double its 500-strong headcount by the end of next year. If it does manage this, and pitch up alongside other players in the big league, it could turn out to be not so different to TripActions after all. The question is, will there be enough room?