What This New Dublin Venture Fund Sees as Opportunities in Travel During a Pandemic

Technology gives the travel sector a chance to retool itself, and many startups could help the industry make the most of its coming, phased recovery from the pandemic.

Yet there’s a problem. Startup founders may be inventive technologists, but they often lack a grasp of the travel sector’s commercial contours. Naivete and inexperience can open a chasm between startups and corporate customers, preventing many travel companies from widely adopting innovations.

Today’s investors take risks by betting on quixotic-sounding ideas that could become a reality thanks to capital. But venture capitalists need to do more to help entrepreneurs build bridges to executives at travel brands. They need to serve as mentors, passing along to founders their acquired knowledge about how the travel sector works.

That’s the view, at least, of Team ABC, the latest venture capital fund to launch with a specific mission of investing in the travel and transportation industry.

“We want to bring coaching to the table along with capital because we see it as a missing ingredient,” said Aurelius Noell, a general partner at Team ABC.

“Coming from aviation into this venture industry, I was surprised,” said Noell, the former chief commercial officer at Level Airlines and Viva Air. “A lot of venture outfits promise to invest more than capital, but then the reality is different. Many founders are left wondering how to distribute, how to get an introduction to the CFO [chief financial officer] at a critical supplier, and so on.”

Dublin-based Team ABC will invest in startups addressing air, land, and sea travel, including both tourism-based and cargo-based operations — with special interests in sustainability and digital transformation. It likes business-to-business startups rather than consumer-facing ones.

Team ABC made its first investment in April 2021 with an undisclosed sum in Yieldin, an inventory management system, based in Paris. Its equity stake is now up to 20 percent.

Team ABC has begun making introductions to potential customers of Yieldin’s services.

For instance, Team ABC’s partners have talked to Tarmac, an Argentina-based consultancy for airlines on revenue management, about distributing Yieldin’s software. Team ABC is also looking into how Yieldin’s algorithms that were made for air travel might be able to help sea-based ferry services, too.

Noell is joined by fellow Team ABC partners Brian Marrinan, who created the NDRC, the first startup accelerator in Ireland, and Clyde Hutchinson, co-lead at Propeller Shannon, a startup accelerator for aviation in Ireland.

Team ABC’s average check size for an early-stage investment will vary by region. In Europe and the U.S., $300,000 to $350,000 will be common, but the check size could rise to $500,000, given market frothiness. In emerging markets, $150,000 will be more typical, Noell said. Team ABC has received funding from some family offices and is aiming for a $30 million fund.

Noell didn’t name future investments.

But a source told Skift that Team ABC is considering taking a stake in SeaRoutes, a Hamburg-based startup. SeaRoutes strives to make intermodal cargo transportation — or moving freight in an intermodal container using different modes of transportation — more efficient. The company also aims to reassure purchasers, such as the Nikes and WalMarts of the world, what their carbon footprints are across the shipping networks.

Aurelius Noell, partner at Team ABC, a new venture capital investor in travel startups. Source: Team ABC.

Noell did say that Team ABC is considering helping to combine a few startups to make their individual software offerings more powerful as a combination platform.

“We might bundle up various products or features that entrepreneurs offer,” Noell said. “Say one person has developed something interesting in scheduling optimization for airlines, and we have another one that does something cool in the payment space for airlines, and another that does another service. We could help the entrepreneurs combine into a platform. Airlines and other suppliers are often more likely to buy a package than a ‘point solution.'”

Team ABC wants to invest more in emerging markets but only wants to bet on founders its principals have met in person. Restrictions on international travel during the pandemic have prevented crucial in-person meetings, holding back the firm’s pace of investing.

“Investing in a startup right now in Mexico or Argentina or India would be next to impossible,” Noell said. “We need to meet founders because the personal touch is a core part of the due diligence. We want to have a mentoring kind of role as these founders are still developing what their business is. We need to get a sense of them in person before investing.”

Joining a Lively Set of Travel Tech Investors

Team ABC will have to jostle with outfits that have invested at the early stage in startups in travel and transportation, including Thayer Ventures, Howzat Partners, Plug and Play (an accelerator), Fosun RZ Capital, Global Founders Capital, Gobi Partners, 500 Startups (an accelerator), Founders Factory (an incubator), and Caixa Capital Risc. Corporate venture capital players include JetBlue Tech Ventures and Amadeus Ventures and the new incubator Amadeus Nexwave.

“Innovation in the travel and transportation space is still in the early innings, and the global pandemic has only accelerated experimentation across the value chain,” said Chris Hemmeter, managing director of Thayer Ventures. “We have always been collaborative investors, and we welcome Team ABC’s announcement.”

Besides venture investing, Thayer also has put together a special purpose acquisition company that may be closing a deal to take Inspirato, a luxury travel club, public.

Howzat Partners, which has been busy raising $120 million (€100 million) for a fresh new fund to invest in travel startups and other digital businesses, also said it welcomed Team ABC to the fray.

“In the more than two decades in which I have been involved in travel tech, I cannot remember a time when there were so many interesting new startups — as well as existing players — globally developing game-changing new tech and innovative B2B [business-to-business] and B2C [business-to-consumer] customer solutions,” said David Soskin, a partner and co-founder at Howzat.

“In the short term, Covid lockdowns had a damaging effect on many travel tech businesses, especially those which are consumer-facing, not to mention the horrendous health impact worldwide,” Soskin said.

“In the long term, Covid will have a very positive effect on the sector,” Soskin said. “Wolfgang Munchau, the FT’s [Financial Times’] European commentator, put it succinctly when he dubbed Covid-19 the ‘end of the analog era‘. Team ABC’s involvement will add yet more fuel to the travel technology rocket.”

UPDATE: This article was updated to make it clear Team ABC asked Tarmac to help YieldIn to distribute in Argentina.