TripActions — Not ‘just another’ Unicorn
Earlier today it was announced that TripActions, the market leader in corporate travel, has closed a $154M Series C Round led by Andreessen Horowitz, one of Silicon Valley’s most esteemed investors. In addition to a16z’s significant investment, we followed on with our current flagship fund SGVC III, alongside existing investors Lightspeed Venture Partners and Zeev Ventures. As part of the round, a16z Founding Partner Ben Horowitz will be joining TripActions’ Board of Directors. This round values TripActions in excess of $1 billion, inducting the company into the ‘Global Unicorn Club’.
This milestone is a major validation for TripActions’ phenomenal product market fit, exceptional growth, and co-founders Ariel Cohen and CTO Ilan Twig’s leadership. As one of the first investors in TripActions back in early 2015, I vividly recall our first meeting with Ariel, Ilan and Oren Zeev who (graciously and luckily) introduced us to one another while he was leading their seed round.
Although the meeting at Venetia Cafe did not include any presentation materials nor a demo, Devon and I were blown away with Ariel and Ilan’s plan to redesign corporate travel from “the grounded airplane and up” through the creation of a technology-enabled corporate travel management platform that combines data science, user-friendly design, and world-class service whilst creating, for the first time ever, an alignment between businesses and their employees.
At the same meeting Ariel and Ilan emphasized that this approach would require significant technology (pulling a massive supply of hotels, airlines, car rentals and trains), 24/7 customer service (so that users are supported while they’re on-the-go), and a clear incentives-based approach to problem solving with nudging. In addition, their platform and solution would also need to be the reconciling point for corporation’s HR software to track booking expenses and the savings of their traveling employees.
It was an impossible mission. One that every seasoned travel executive would dismiss on the spot as unrealistic.
For this very reason, we were sold on the spot and committed to invest whilst finishing the best espresso Palo Alto has to offer.
TripActions’ vision, approach, and product were everything we wanted to see in a software startup. It echoed SGVC’s thesis of investing in fintech startups that are based in Silicon Valley, that have a clear business models, a huge addressable market (>$1.5TN), an experienced team, trusted co-investors, and a clear growth strategy.
What none of us could have predicted was how, in only a few years in, TripActions’ solution could be so well received. We are constantly amazed at how the market has understood, received, and demanded TripActions’ product and how companies and travelers love their customer service.
This market response is clearly represented in TripActions’ growth and customer feedback. This includes being named on the 2018 LinkedIn Top Startups List, signing on big clients like Lyft, Dropbox, Sara Lee Frozen Bakery, Twilio, and Survey Monkey and holding an NPS score and a % CAGR most other companies can only dream of.
TripActions’ employees love working there, their corporate travelers love their software solution and their service, and their customers love the savings brought about by TripActions’ approach to booking travel.
This is a text book (if there was any that could have been written) perfect storm.
Which leads me to write this quick missive —
Make no mistake, TripActions is not ‘just another’ unicorn.
CB Insights recently released their ‘Global Unicorn Club’ list showing current global private companies that are valued in excess of $1BN (the industry definition of a ‘unicorn’). As of Q3 2018, there are 285 unicorns around the world with cumulative value of $894BN (less than Apple’s current valuation and close to Microsoft, Amazon, or Google’s current valuation). Variants of the ‘unicorn’ term include a ‘decacorn’ (valued at over $10BN) and a ‘hectocorn’ (valued at over $100BN).
If you were to examine the list, you will find that about 18 companies (6% of total companies) are decacorns and account for roughly 41% of the cumulative value of the list. About 70 companies (24% of total) are valued between $2BN and $10BN and account for roughly 32% of cumulative value. The remaining 195 companies (68% of total) range between $1BN to $2BN valuation and account for roughly 27% of the cumulative value of the list.
This sharp contrast shows that even within this (otherwise short) list of prominent companies there is a significant step up that is required to get to a valuation that is in excess of $2BN. While the odds of becoming a unicorn are extremely rare (and yes, as rare as a micro-fund like SGVC investing in one as early as we did), the odds of becoming a decacorn are less than 0.06%.
Allow me to make a bold prediction and share it with whomever took two minutes to read this post: SGVC strongly believe that TripActions has all the ingredients required to become a decacorn (valued at over $10BN) within the next 5 years. We see tremendous potential for TripActions to become a global company with an undisputed market leadership in the $1.5TN business travel industry. We believe they have what it takes to outperform many of the incumbents who currently dominate the marketplace.
Congratulations to TripActions co-founders Ariel Cohen, Ilan Twig, TripActions team, Oren Zeev (who was the first to identify what TripActions was ought to become) and welcome Ben Horowitz to this awesome journey!