GetYourGuide has moved into the $1 billion+ funding league with its latest raise. This might seem high in the short term, but not if projections for growth in the experiences sector hold.
Tours and activities platform GetYourGuide’s closing of $194 million in equity and credit financing pushes the travel startup’s total investment over the $1 billion threshold, and solidifies its lead as the most heavily-funded company in the experiences sector.
Blue Pool Capital led the $85 million Series F financing round, with participation from KKR and Temasek. UniCredit led the Revolving Credit Facility (RCF) of $109 million, with participation from BNP Paribas, Citibank and KfW.
The company’s estimated valuation is reported to be close to $2 billion, an increase from the last publicly-disclosed valuation of $1.4 billion. Tao Tao, GetYourGuide co-founder and chief operating officer, confirmed the new investment to Skift but declined to share the company’s valuation. He said the raise points to investor confidence in GetYourGuide becoming the “absolute best vertical search engine for discovering and booking travel experiences.”
With its latest investment, Tao said GetYourGuide is doubling down on artificial intelligence and large language model tools and insights. The company is specifically focused on growth in Europe and North America, claiming that “booking volumes in the first quarter of 2023 are close to four times the first quarter of 2019.”
GetYourGuide’s co-founder and CEO Johannes Reck has previously underscored the company’s singular approach to focus on experiences.
GetYourGuide has just launched its customer-facing chatbot and is set to continue with significant investment in artificial intelligence plugins “spread across all of its technologies,” added Tao. “We have been using machine learning with our data science team already for years, especially in what we call search and discovery effort.”
The company is also investing heavily in filtering and structuring experiences, to help consumers self-select themselves into what Tao called “relevant collections.”
“For example, we have a collection for first-time visitors to Paris, or for hidden gems in Paris, or for family-friendly activities in Paris. We’re creating pathways for consumers to find relevant experiences through these filters, collections, date pickers, and all these things. To really drive revenue, not only to whoever’s at the top of the laundry list, which is the hotel model, the hotel user experience,” said Tao.
“For us, what we see a lot is customers really go into different avenues based on their intent, based on how often they’ve been to a certain destination and so on. On the supply side, a lot of technology goes into actually surfacing this data, making it into a structured form and then surfacing that so that consumers can use it in their collections and filters and searches,” he added.
When it comes to the supplier side, the company intends to leverage large language models to “improve content, localization, customer service, but also to improve supplier onboarding.” Investment into technology to automate several steps for listing with GetYourGuide, as well as simplifying the complexity of pricing and availability was critical, said Tao.
“And then the second piece is, once you already distribute through GetYourGude, how can we help you drive even more digital revenue?”
This would see a deeper focus on insights, available to all tour operators who list with GetYourGuide Tour operators already have access to sentiment analysis of their tours and added insights of competitive benchmarking, according to Tao.
“We very much believe in a level playing field. While we do have account managers for bigger accounts, who give you some personalized tips, we very much believe that technology is a great equalizer and want to provide equal access to operators.”
An example of insights for operators includes prompts for tours set to expire, benchmarked against booking patterns of people booking in advance for longer trips related to that tour, with the tour operator needing to add new inventory or face missing out on generating a booking and revenue.
Tao believed the timing for the investment couldn’t be better.
“We have undergone a significant digital shift during the pandemic. I’ve mentioned this before, if there’s one winner from the pandemic, it’s the QR code. People are now educated not to stand in line and to book online and that’s something that we’re benefiting from. That’s a major tailwind, plus the tailwind of experiences in general. Plus our business, how it’s doing, that gave people the confidence to invest now and to accelerate all of that.
“I think there are two things that are important in any category leader,” added Tao, ” how big is the market and what’s your momentum? We believe the market is huge. That’s also really the reason why investors were willing to invest in us and raise a significant round despite the economic downturn that is currently, I would say, plaguing all other industries at the moment,” said Tao.
As a private company, GetYourGuide does not disclose its financials, but has claimed to be profitable before. “In terms of profitability, what I can say is we have a very structurally, profitable core business model. I think this is also evidence by a bunch of other companies in the marketplace category. So there’s nothing, I would say, out of the ordinary here,” said Tao. “For us is to use this investment to grow strategically in a very measured way that focuses on generating attractive returns for investors, especially in the current climate in which profitability and returns are greatly valued.”
UPDATE: This article has been updated to include an estimated $2 billion valuation of GetYourGuide.
Photo credit: Tao Tao, Co-Founder and COO of GetYourGuide GetYourGuide