WeTravel books $27M to build fintech and more for bespoke group travel • TechCrunch
Travel is back on the radar for investment, with both consumers and business users starting to move again long after the pandemic of staying in one place. Today, the startup called we travel — which builds technology to meet the specific needs of group travel — has raised $27 million, money it will use to expand its business following strong growth last year.
The company provides payments and other tools to nearly 3,000 businesses, and works with 500,000 customers using its platform. Deal volumes have grown by 30% and revenue is currently 3 times the level it was before Covid. CEO and co-founder Johannes Koppel said he believes these numbers will double again in 2023 “as a conservative estimate”.
Left Lane Capital leads Series B, with former backers Swift Ventures and Base10 also participating along with angel investors including Klarna co-founder Victor Jacobson.
WeTravel had previously only raised $7 million in the 8 years since it was founded. We understand from the sources that this Series B was made with a valuation of just over $100 million.
The startup has, conveniently, done some travel on its own. Originally, Kiobel and his co-founders Garib Mehdiev (CTO) and Zeki Prabowo (CMO) moved from the Netherlands to the Gulf region to start work, only to find it impossible to navigate visa waters to bring in engineers and other technical talent too. So in 2019, the three WeTravel founders once again moved across the pond to the Netherlands. Covid prompted the idea that the startup needed to have a team in one place, and today, the majority of the company’s staff and customers are located in the United States, and it has been incorporated there, while the three founders, as well as the WeTravel product and engineering teams, are all in Amsterdam.
The gap in the market that WeTravel is seeking is one that appears to have arisen, ironically, with the growth of online travel services.
In the old days before the internet, travel agents were the most in control when it came to booking tickets and total vacations for many consumers and businesses, as individuals and groups. Online tools have changed the game for individuals, but interestingly the same is not true for groups that want to, for example, book a multi-day excursion or getaway that might include multiple hotels, activities and food, which could include multiple people, multiple locations, and possibly Hundreds of suppliers (not just hotels and airlines, but restaurants, tour operators, insurance providers and more), the need for flexible payment options – different people paying different amounts, payments in installments, lump sum payments in turn need to be itemized across different suppliers.
“It’s not so much about the payment as about what happens next, what the travel company has to do with that money,” Kiobel said. “A typical trip might cost $10 to a user, and the vast majority of it goes to suppliers. It becomes about money management. And the more involved the trip, the more Number of suppliers from restaurants and carriers to airlines, hotels and more.” Moreover, there are different transfer fees and payment methods from company to company, and from country to country.
The WeTravel platform covers two main parts of this process: helping those who bring a travel group together to organize suppliers and plan everything; Then deal with the different aspects of the payment process, whether it’s setting up payments in installments, working in different currencies and payment methods, and paying to different suppliers on their individual terms.
Keoppel describes the fintech side of the business as “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 able to handle a certain segment of the market that WeTravel can’t offer, Especially when used in conjunction with the first part of its product suite to coordinate itineraries and suppliers.
Keoppel thinks this is a model we may be seeing more of in the B2B fintech world. “I think in the next couple of years there will be more specific SaaS platforms that integrate payments as a component of specific industries,” he said. (In fact, today you already have some handling of this, for example, for beauty and wellness, with building tools such as Fresha, Boulevard and Style Seat specifically to meet the needs of this sector.)
This is also something WeTravel customers have tried sometimes but failed to build themselves. As travel agents have become “travel consultants” and focus on these personalized travel experiences, some have turned, he said, to “tailor-made systems that build themselves, but what I’ve come to realize is that what we’re missing is the ultimate customer experience. They don’t have the time to build a beautiful billing system.” Plus the payment methods and all the other things.”
The one thing WeTravel doesn’t currently offer is discovery to its users – that is, travel advisors may still turn to their little black books, or perhaps these days TripAdvisor, Yelp or other recommendation and discovery platforms, to find interesting restaurants and more. This is something WeTravel can move into as it grows.
One important elephant in the room is what happens when other big travel platforms think about how to do more in this area: they already have all the big supplier relationships and it might be about building or buying tools to meet this use case.
Vinny Bogey, who led the investment in Left Lane, recalls that his parents once ran a travel agency, “so that was great for me,” he said. “They hit the sneaky big markets and this is definitely one of them.”
He noted that the Covid winter that has come on travel appears to be thawing, even in the current economic climate.
“The data tells us that travel is mostly back now,” he said. He notes that the company has grown threefold since 2019, confirming that WeTravel in particular may have proven the axiom that if a startup manages to weather the pandemic, it can stop it entirely. “Church groups, students, there are more stable sources of income here than just stag parties.”