Why Travel Tech Startup Heygo Closed a Year After Raising $20 Million

The startup Heygo generated millions of dollars in income for tour guides during a time when their normal business was nonexistent. 

The London-based virtual experiences platform was founded in 2020 as a way to help people “travel” when the world was shut down during the pandemic. Customers could attend virtual tours led by local tour guides. 

And Heygo raised $20 million in venture capital in February 2022 with big plans to keep growing long after the pandemic. 

After nearly three years in operation, Heygo shut down permanently this week.

“The metrics changed post-Covid. There just wasn’t a big enough market for the amount of money that we raised,” said John Tertan, who graduated from Oxford University in 2015 and then worked for a law firm for four years before founding Heygo. 

“It’s a very tough decision to return capital, but it just felt, under the circumstances, the most responsible thing to do with the funds.”

Tertan was a speaker at Skift Forum Europe in 2022 [see the video below] one month after he raised venture capital. At that time, he shared optimistic ideas about how the livestream platform could play a role in the future of travel, potentially impacting travel marketing and the way local tour operators interact with global audiences.  

The number of bookings had doubled to 4 million between the time Heygo raised the money and the following November. But the customer activity hit a plateau as people preferred to travel in person post-pandemic  — and a startup that has raised money needs to be growing to keep investors happy. 

Beyond its basic use as a platform, Heygo led to the creation of a community, connecting travelers virtually who sometimes met in real life. Telling them that the community was coming to an end was the saddest part, Tertan said. He broke the news to a crowd of about 1,200 people during a virtual town hall.

“It was just really quite emotional,” Tertan said. “We got to quite a passionate group, so that’s a bit of a shame.” 

Some of the guides set up their own groups, and the Heygo team spent their remaining time helping them make connections so the community could live on. 

While Heygo did have some contracts with businesses, the platform was more set up for consumers, and that was the model it maintained. The business-to-business approach, however, is likely the key to life for some of the other pandemic-born virtual experiences companies that are still going. 

Wowzitude, for example, is partnering with senior living organizations to provide experiences to people who could not otherwise travel, as well as with tour operators and travel suppliers to give prospective customers a taste of what’s to come, said founder Susan Black. 

Wowzitude also operates through existing platforms like Zoom. And the company is fee-based rather than tip-based, which she believes will be more sustainable for the guides. 

“Even though we’ve won a number of pitch competitions to help our awareness, we’ve chosen not to take investment, at least not this time,” Black said. “We don’t need to; we’re profitable, and our focus is strictly on scale. And also on the product itself.”

In the end, Tertan said he and the investors were in agreement that closing Heygo would be the best move. The series A was led by Northzone, with support from Lightspeed Venture Partners, Point 9 Capital, TQ Ventures, Ascension, the Fund, and many angel investors.

“They were super positive. Our relationships actually are great, which is fantastic,” Tertan said. “It makes me feel comfortable that for the next thing, I can pick up the phone and crack on.”

Along the way, he believes he learned some valuable lessons in how to build a company, such as understanding customer pain points, as well as how to manage a team of nearly 20 employees. And another lesson: Maybe don’t raise so much money so early for such a niche product because more money means bigger goals to reach.

“It’s so hard to know, as a first-time founder,” he said. 

As many early venture capitalists have said over the years, they invest in the founder arguably even more than the founder’s idea. And founders who have some previous companies under their belt are less likely to make the same mistakes again, and that usually makes them a better investment. 

Tertan may be raising money again in the future for another idea, though he is unsure exactly where his path will lead. First, he’s going to take some time off to travel and visit with family and friends. 

“I do still have the itch,” he said. “I definitely think it would be a shame not to use what I’ve learned to try something else or to build other things.”