Travel is back on the investment radar, with consumers and business users moving again after a long pandemic period of staying in one place. Today, a startup called WeTravel – which develops technology for the specific needs of group travel – raised $27 million, money it will use to expand its business after strong growth last year.
The company provides payments and other tools to some 3,000 businesses, working for 500,000 customers using its platform. Transaction volumes have increased by 300% and revenues are currently at 3 times the pre-COVID-19 level. CEO and co-founder Johannes Koeppel said he believes those numbers will double again in 2023 “as a conservative estimate”.
Series B is led by Left Lane Capital, with previous backers Swift Ventures and Base10 also participating alongside angel investors including Victor Jacobsson, one of Klarna’s co-founders.
WeTravel had previously raised just $7 million in the eight years since its inception. We understand from sources that this Series B was made at a valuation of just over $100 million.
The startup, deservedly, has been on its own journey. Originally, Koeppel and his two co-founders Garib Mehdiyev (CTO) and Zaky Prabowo (CMO) had moved from Azerbaijan, Indonesia and Switzerland to the Bay Area to start the business, only to find impossible to navigate visa waters to also bring in engineers and other technical talent. So, in 2019, the three founders of WeTravel moved across the pond to the Netherlands. COVID has ended the idea that a startup has to have its team in one place, and today the majority of the company’s sales team and customers are in the United States, and they are there. incorporated, while the three founders, as well as WeTravel’s product and engineering teams, are all in Amsterdam.
The gap in the market that WeTravel is looking for is one that seems to have been created, ironically, with the growth of online travel services.
In the pre-internet era, travel agents reigned supreme when it came to booking tickets and vacations in general for many consumers and businesses, both as individuals and groups. Online tools have changed the game for individuals, but interestingly the same is not true for groups who want to, for example, book a multi-day trip or retreat that may involve multiple hotels. , activities and meals, which may involve multiple people, multiple locations, potentially hundreds of suppliers (not just hotels and airlines, but restaurants, tour operators, insurers and more), and the need for flexible payment options – different people paying different amounts, installment payments and lump sum payments which in turn require itemizing between different providers.
“The important thing isn’t so much the payment as what happens next,” Koeppel said, “what the travel agency has to do with those funds. A typical trip might cost the user $10 , with the vast majority going to suppliers. . It becomes a question of funds management. And the more travel is involved, the more the number of suppliers, from restaurants and transport companies to airlines and hotels etc. In addition to that, there are transfer fees and different payment methods from company to company, country to country.
WeTravel’s platform covers two main parts of this process: helping those organizing the group trip organize suppliers and plan everything; then manage the different aspects of the payment process, from setting up installment payments to working with different currencies and payment methods, and paying to different vendors on their individual terms.
Koeppel describes the fintech side of the business as “the PayPal for travel” and says it’s complex enough that companies like PayPal, Stripe and other big names in online payments haven’t really been in on it. able to address the particular segment of the market that WeTravel serves, especially when used in tandem with the first part of its product set to coordinate routes and suppliers.
Koeppel thinks this is a pattern we might see more of in the B2B fintech world. “I think there will be more specific SaaS platforms in the next two years that integrate payments as components for specific industries,” he said. (Indeed, today you already have solutions for, say, beauty and wellness, with companies like Fresha, Boulevard, and Style Seat building tools specifically for the needs of this vertical.)
It’s also something that WeTravel customers have also sometimes tried but failed to build on their own. As travel agents have become “travel consultants” and focus on these bespoke travel experiences, some have turned, he said, to “tailor-made systems that they build themselves , but what I realized is that what’s missing is the end customer experience .They don’t have time to build the beautiful billing system, payment methods and everything else. “
One thing WeTravel currently doesn’t do is offer discovery to its users – meaning travel advisors might still turn to their little black books, or these days maybe TripAdvisor, Yelp or other recommendation and discovery platforms, to find interesting restaurants and more. This is something WeTravel could potentially incorporate as it grows.
“A big elephant in the room is what happens when other big travel platforms think about how they could do more in this area: they already have all the big supplier relationships and it could be create or purchase tools to address this use case.
Vinny Pujji, who led the investment for Left Lane, recalled that his parents once ran a travel company, “so it was cool for me to see,” he said. “You come across some big sneaky markets and this is absolutely one of them.”
He noted that the COVID winter that has befallen travel appears to be melting away, even in the current economic climate.
“The data tells us that travel is mostly back now,” he said. He points out, however, that the business has tripled since 2019, pointing out that WeTravel in particular could have proven the axiom if a startup can make it through the pandemic, it can stop it altogether. “Religious groups, students, there are more stable sources of income here than bachelor parties at destination.”