The New $75 Million Venture Fund That Will Invest Heavily in Travel Startups

Brad Gerstner, a serial angel investor in travel, and the hedge fund he founded and runs, Altimeter Capital, just closed on a $75 million venture capital fund that will be heavily involved in funding travel startups.

Gerstner, who founded hotel-search startup Room 77, tells Skift he will continue his personal angel investment blitz (Room 77, HotelTonight, Nor1, SilverRail Technologies, Space Monkey, Fundly, Farecast and Zillow) when the funding is $100,000 or less, but larger investments into private companies will come out of Altimeter's new venture capital fund.

"This gives us a lot more dry powder," Gerstner says.

The fund officially will target travel, Internet, software, and general consumer sectors, but you can expect there to be a heavy dose of travel as Gerstner says "there are a lot of companies at the intersection of internet software and travel."

The fund, which will consider both B2B and consumer-oriented startups, will focus on B and C Series rounds, Gerstner says, and would help recipient companies build their business development and management teams.

Gerstner says that over the last year or so he's seen a "disproportionate" number of investment pitches aimed at the "hospitality universe," but he doesn't mean that in a negative way.

In the hotel sector, Gerstner says "search is a long way from being perfect," and he expects a lot of innovation to come from existing and new players.

Gerstner cites Duetto Research, with its revenue-management solutions for hotels, his own Room 77, and HotelTonight, as among the exciting opportunities he's seen of late in hospitality.

Altimeter invested in Duetto Research, as well as Kayak and Hubspot, while Gerstner invested in both Room 77 and HotelTonight.

The new fund's interest in the hotel sector "is driven in many respects by what entrepreneurs are doing," Gerstner says.

Altimeter Capital, based in Boston, is opening a new office in Silicon Valley.

Will there be a conflict between Gerstner's Room 77 role and the new fund?

A spokesperson says: "Brad has been investing for years, and Altimeter will continue making investments in companies with solid fundamentals and growth prospects. The Room 77 venture is completely external to Altimeter."

Gerstner intends to keep up with his angel investing, as well.

Gerstner says he's been doing angel investments on his own in travel startups for a decade and intends to continue doing so.

Says Gerstner: "The dialogue with entrepreneurs has never stopped."