The company, which is backed by Concur co-founder Steve Singh, is still on its mission to quietly dismantle the underlying technology and commercial kickbacks that the corporate travel industry was built on. That costs a lot of money.
New York startup Spotnana has tapped investors for more money as it continues its mission to unravel the complexities of corporate travel.
It has now raised $75 million in a round led by Durable Capital Partners, with participation from existing investors Madrona Venture Group, ICONIQ Growth, Mubadala Capital and Blank Ventures.
This tops up its $34 million funding in September last year, when the company officially came out of its so-called stealth mode.
The startup describes itself as a travel-as-a-service platform, and will use the financing to drive faster adoption of its technology and accelerate hiring.
Spotnana claims it is building a new architecture for the business travel industry, and has four types of four customers: corporate clients, travel agencies, technology partners and supplier partners. Its goal is to create an open platform, devoid of “biased” content, meaning flights or hotels that are recommended because there are financial incentives involved.
“Spotnana does not accept global distribution system incentives and does not hide or bias content to reach supplier volume targets,” the company says.
So this new Series B funding will be used to continue building out a wide-ranging technology stack that includes online booking tools, a booking engine, mid-office, and a new system of record for booking travel.
“We’re changing the infrastructure that you transact on,” said co-founder and CEO Sarosh Waghmar. “Unfortunately the current economic models are driven by the global distribution systems. We don’t have any of those incentives, which is why we’re building this infrastructure, and bringing in multiple sources. That’s what we’re focused on, which is why we’ve got funding; they’ve seen the customer traction we’ve got in the past 24 months.”
So what do the global distribution systems, namely Amadeus, Sabre and Travelport, make of it all?
“They understand we’re bringing innovation,” Waghmar said. “In this market, everyone’s looking for business. The past two years have been tough on everybody. From their perspective, they look at us as someone who’s disrupting the space.”
Airlines are also onboard, the CEO claimed. They like the fact they can sell content directly, cutting out the middleman. It’s not all about guaranteeing volume. Spotnana offers direct connect, API and so-called New Distribution Capability technology.
“Our message is resonating with them,” he added. “They realize we’re not just here to plug in the content from the global distribution systems, or NDC, they do see there’s a lot of value Spotnana’s able to provide to them, at the back end, and the kinds of customers we’re bringing to the table.”
In terms of customers, Spotnana is aiming for larger global organizations with offices dotted around the world.
“If you look at any of the large enterprise accounts, 95 percent of the market is concentrated by a company like Concur,” continued Waghmar. “Each country would have a separate installation, country by country, and it takes 10-18 weeks …. we can deploy many countries in one instance.”
Airlines in particular have long wanted that ability to reach these kinds of high-paying business travelers directly too, in order to personalize offers and upsell ancillaries, and Waghmar said the “Spotnana ID” was already live.
Spotnana’s certainly been recruiting too (no sign of a labor crisis here).
Last month it poached Seth Anagnostis from flight data firm ATPCO, where he was head of content strategy. He’s now in charge of channel partnerships at Spotnana.
In September it appointed Bill Brindle, the former chief operating officer at American Express Global Business Travel, as its new vice president, travel operations and managing director for Europe, the Middle East and Africa. Prior to that the company named travel technology veteran Johnny Thorsen as its vice president, strategy and partnerships.
“We’re fortunate we’ve been able to attract this level of talent,” said Waghmar. “It’s unique compared to most startups, we’ve got amazing travel domain expertise.”
Spotnana’s other founder, Shikhar Agarwal, hails from Google Brain, while Quyen Fahey, vice-president of business operations, used to work at Amazon Web Services. Then there’s its executive chairman, Steve Singh — Concur’s co-founder, and also the managing director at Madrona Venture Group.
The company has in fact doubled the number of employees to 200 people over the past year.
In September, Skift reported Spotnana’s raison d’etre was to strip traditional technology vendors of their clout in corporate travel. That doesn’t seem to have changed, but attempting to realign commercial models, on top of developing a new technology infrastructure, is a large nut to crack.
But Waghmar remains determined. “Think of us as Amazon Web Services for travel,” he said. “We’re trying to solve an actual problem, rather just build a shiny new product.”
And for Singh, who sold Concur to SAP for $7.4 billion in 2014, it’s likely the same situation. His appetite doesn’t appear to have waned either. In October last year he led an $8 million Series A funding round in meetings management platform Troop.
As well as more recruiting, let’s not rule out Spotnana going on a shopping spree over the coming months with its deeper pockets. It’s worked for plenty of other corporate travel companies looking to make their mark in this highly fragmented market.
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Photo credit: Spotnana has raised more money to continue building out a wide-ranging travel technology stack. Shawnanggg / Unsplash