TravelPerk is another example of a company rethinking employee roles by using the latest advancements in artificial intelligence.
TravelPerk, a growing business travel agency and software platform, has raised another $104 million.
It’s an extension of the company’s $115 million round from January 2022, and that was an extension of the series D round of $160 million in April 2021. The latest round was led by SoftBank Vision Fund 2.
TravelPerk has now raised a total of $513 million and it said the latest round values the company at $1.4 billion.
TravelPerk allows clients to book and manage corporate travel through a software platform that can be integrated with others that a company may use. TravelPerk is focused on mid-tier and smaller companies, with clients that include Wise, Revolut, Redbull, GetYourGuide, and Aesop. It’s focused on expanding in the U.S. and Europe.
The company has 1,200 employees, including about 700 at its headquarters in Barcelona.
TravelPerk said it grew revenue 70% in 2023 and gross profit increased by more than 90% as booking volumes approached $2 billion.
A Change of Plans
TravelPerk had not planned on raising money again, said Avi Meir, the company’s CEO and co-founder.
By the end of 2022, the late-stage funding market had essentially dried up, and what was available had high interest rates and demanding terms. So TravelPerk adjusted the business to follow a path for growth without additional funding.
“I didn’t see any reason to raise in such a market,” Meir said. “We just decided to own our destiny, and we started 2023 with this plan in mind.”
But when OpenAI released the first generative AI model, he saw an opportunity to rethink the product with that new tech as a backbone. The company has spent the last year integrating AI to automate tasks like updating flight changes and completing ancillary product purchases.
The new funding allows TravelPerk to continue that work at a faster rate.
“We didn’t need the money. We were well advanced in our path to becoming profitable and breakeven from a cash flow perspective,” Meir said. “And that’s why we could raise with really good terms.”
More and AI and Automation
TravelPerk is continuing to experiment with ways that AI can make its tech product and operations more efficient.
One example so far: automating back-office tasks.
TravelPerk used to have about 10 to 15 workers responsible for reading thousands of emails each day about information like trip changes. If an airline changed the flight time, for example, TravelPerk would be notified via email, and then an agent would have to determine the effect on the client and then communicate that.
“We automated that using AI,” Meir said. That means people no longer need to read all of those emails, and the platform can communicate any changes immediately rather than that information sitting in a queue.
“Now our agents can do more value-added work,” he said.
TravelPerk has not released a chatbot as competitors have — and there are no plans to do so. He believes flight searches are effective as they exist.
“It was a lot of individual projects in development we did — less visible than if you just release a chatbot and give it a name and say, ‘This is AI,’” he said. “I think this is a very lazy way to approach AI. It’s good for marketing, but it’s not great for the customer.”
Demand for corporate travel platforms has been rising steadily since the pandemic.
And tech startups in that sector are consistently raising venture capital as companies look for simpler, more cost effective ways of managing travel expenses.
The Global Business Travel Association expects travel spending to exceed pre-pandemic levels of $1.4 trillion this year and reach nearly $1.8 trillion by 2027.
With a market of that size, Meir is not worried about competition at this stage, especially because so many companies are still managing travel expenses manually.
“I don’t think anybody really knows. We are creating a new category,” he said. “It’s a new way of doing business travel that is based on technology, mostly, but still has humans evolved.”
Correction: This story has been updated to correct the lead investor.
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Photo credit: TravelPerk has raised another $104 million. Pixabay / Pixabay