At Felix we are focused on how digital is transforming our lives, across all lifestyle verticals, with the emergence of new brands and distinctive consumer propositions. Travel is one of the largest online markets in the world ($800bn), and massive players have emerged, from Booking.com (acquired by Priceline but probably the biggest online success story in Europe) to Airbnb. 18 months ago, our quest to deep dive into Travel started and this led to our first investment, TravelPerk (a B2B corporate solution for the Millennial professional). Today we are delighted to welcome PerfectStay in the Felix family, an emerging leader in the packaged online travel market, with French roots, and a first €15m funding round.
The online packaged travel market is around $70bn per annum, growing 9% a year. In this market, there is no shortage of offering, but there is also demand for a combination of curation, price and flexibility. This is what Perfectstay offers by teaming up with trusted brands and curating with them a distinctive packaged travel offer (flight + hotel), accessible via the Perfectstay tech platform (especially well-suited for mobile). The key word is “trusted” as the smart element of the model is to leverage the communities and reach of the trusted brands they team up with, to build together an attractive business, offering targeted products to an attractive audience. Initial partners include airlines (Air France, Emirates) and eCommerce players (eg Vente-Privée). This model enables them to go round the traditional biggest expense in online travel, i.e. online marketing, as customers come through the brands rather than via Google or Facebook.
Travel is important to us at Felix Capital for several reasons, First it’s a market where Europe has a key edge, with France, Spain and Italy in the top 5 markets in the world, as illustrated above. The other reason is that Travel is all about experience, which is a key aspiration of our times, in particular from Millenials, but also from other generations who are also increasingly eager to share moments and relax in new settings. In addition, Perfectstay plays well within our core themes around “The power of Brands”, as their whole model is geared to partner with well established brands and enable them to add a new revenue model, aligned with their brand mission. They started with airlines and retail players in France but will extend into new types of partners such as media, with new countries starting with the UK and Germany, and more to follow.
People, people, people. We said it before, our business, and ethos is all about people first. We were struck when we met Raphael Zier, Laurent Curutchet, Stéphane Libre and Ludovic Bailly, the four super-seasoned founders of Perfectstay, by how much they were on top of the proposition, had a (very) big vision and managed to make something pretty complicated appear easy. They are on top of tech, on top of sourcing, on top of customer support, on top of pretty much everything we could think of… and they want to build a global leader in their market. In addition this investment enables us to team up with our old friends at Partech, with whom we could offer a complementary footprint and compelling syndicate.
Impressive growth. Perfectstay was set up in 2016 and started selling in 2017, reaching a €13.4m turnover, without any external funding, just the team’s initial investment. This was very impressive, and even more so as they kept on beating budget… and Perfectstay currently expects to grow over 5x in 2018.
This is not the end in Travel for Felix, on the contrary, both TravelPerk and Perfectstay, which are both investments from our 2nd fund, have made us even more excited about potential opportunities in Travel driven by new customers (Millenials), technology shifts (Mobile) or emerging brands (btw you should check out the awesome Travel content on goop…).
Finally the other element that stands out is that this is yet another exceptional team (and opportunity) from France. Since we launched Felix, as a thematic investor, we had no specific geographic target but we have seen France shoot straight to our top market, ahead of the US and the UK in our portfolio construction. We have a lot to do in France and will continue to be committed to partner with the best founders in line with our investment thesis.