Reinventing travel for millennial professionals: Our investment in TravelPerk
Today we’re excited to announce we’re coming on board the TravelPerk journey by co-leading their Series B, together with Target Global. We are joining earlier investors LocalGlobe, Spark Capital and Sunstone who also participated in the round, alongside Amplo.
TravelPerk (“TK”) is the next generation travel booking and management platform pioneering the future of corporate travel. Our investment in TK unlocks two important milestones for Felix:
- Our first investment for Felix Capital 2, our $150m second fund. After launching Felix Capital with Felix Capital 1 ($120m fund) early in 2015, we announced the closing of our second fund last year. We smoothly transitioned from Fund 1 to Fund 2 with our last investment in Fund 1 revealed in January 2018: Highsnobiety.
- Our first investment in Travel, one of the biggest lifestyle categories. After having invested in several digital lifestyle categories, including apparel/fashion (Farfetch, Highsnobiety, Business of Fashion), wellness (Goop, Urban Massage, Shine, Athos), food (Deliveroo, Frichti, La Ruche, Allplants) and mobility (Heetch), we decided 18 months ago to launch a deep-dive into this gigantic ($7.6tn) market. From this deep-dive, TK came out as the best opportunity in corporate travel, and below we’ll explain why.
The Corporate Travel Industry is large and at an early stage of digital disruption. We love BIG markets! Today, TK is at the forefront of reinventing business travel — a category that is worth $1.25tn globally, and growing. The market is highly fragmented, with the largest player (American Express) representing only 2.5% market share (c. $30bn of bookings). Online penetration is relatively low (45% vs. 65% for leisure) and a vast majority of players are still traditional offline travel agents.
A “consumer-grade” enterprise software. At Felix Capital we have a thematic focus towards new generation of brands and platforms in lifestyle, as well as related enabling technologies. With TK, we combined both. The booking platform is a consumer grade one-stop shop designed around the traveler, and aggregates the world’s largest bookable inventory by integrating not only with hotels, airlines, and rail companies, but also with all the leading leisure travel sites too (including Booking.com, Expedia and Airbnb). The platform includes a powerful software stack, enabling businesses to manage their second biggest controllable expense (after salaries). This solution eliminates friction between travellers and managers due to a streamlined and transparent approval processes, whilst enabling colleagues to stay fully informed.
Afor A-Team. We proactively reached out to Avi (Co-Founder & CEO) in February 2017, but as you can see below, at first it didn’t quite work out! (The lesson here: never take no for an answer)
We finally met a month later in Barcelona, when I popped at their office uninvited. (Looking back, definitely no regrets) You could feel the execution intensity combined with a great uplifting culture. These type of “energies” are always driven from the top and at TK, the two cofounders, Avi and Javier, have assembled a great team of experts around them. Avi (CEO), completed his military service and spent the following 12 years in the travel industry. His last business (Hotel Ninjas) was sold to Booking.com where he met Javier (CPO). Javier spent the last 4 years at Booking.com, as founding member of the Global Performance & Innovation team. Sergio (CTO) and Dave (VP Engineering) have respectively 20 and 15 years of experience and were both lead engineers at Skyscanner. JC (VP Sales) and Gidi (VP Marketing) spent the last 10 years scaling SaaS businesses. And the same goes for the VPs on the admin front where Xavier (CFO) and Albert (HR Director) have 20 years and 10 years of expertise respectively. We won’t dwell on the other 75 team members but we have been blown away by the quality of the team throughout our process. When looking at a company we always assess the capacity for founders to attract strong talent as a core investment criteria— Avi and Javier are definitely talent magnets.
A business ready to scale. It’s good to meet companies way before a financing round - it provides the time needed to build genuine relationships and to start proving you can be relevant. It’s also quite convenient because it allows you to live-track their capacity to scale. Although TK is not a traditional SaaS company (no license fees, usage based pricing), their growth has been spectacular in 2017 — doubling consistently every quarter and finishing the year with 1200% growth year on year. After bagging 1000 corporates in 2017, it didn’t come as a surprise when TK were ranked the fastest-growing SaaS company in Europe — and the fourth fastest-growing globally — on *the SaaS 1000 list.
A culture of Happy Customers. In the tenth principle of our manifesto, we explained why we called ourselves “Felix”:
TK grew their customer base with negative churn in 2017! The TK culture is to be 100% focused on their customers’ satisfaction: it might happen that the tech product won’t (yet) be able to fulfil all your road warrior requirements, but the 24/7 customer support will more than make it up to you. Today, TK is leading its sector in customer satisfaction on review sites such as G2 Crowd and Capterra, and they plan to continue doing so for the duration of their journey.
We feel both “happy” and “lucky” to have won the trust of Avi and Javier and to be onboard with such a great group of co-investors. The journey ahead will no doubt be long (building the largest Corporate OTA worldwide doesn’t happen overnight) but definitely exciting!
In the meantime we can “sit back, relax, and enjoy the flight.”
Antoine & the Felix Team.