SnapTravel just raised an $8M Series A. Here is the story.

Today — we are excited to announce an $8M USD Series A round led by iNovia Capital.

We started SnapTravel just over a year ago (April 2016), offering hotel deals over Facebook Messenger, and quickly established ourselves as the leader in conversational commerce. At f8, we were featured during the keynote address and announced over $1M in revenue. Since then, we have been moving aggressively — launching on SMS and Viber — while seeing double-digit month over month growth.

When looking for a lead investor for this round, we wanted a partner who truly believed in our vision of conversational commerce. We were also looking for an investor who wasn’t scared of travel and understood the massive evolution taking place. iNovia has strong theses in both these sectors with multiple investments including smooch, Workfusion, RouteHappy, Busbud and another undisclosed conversational commerce vertical stack. While most VC’s back away from travel given the size of the incumbents, iNovia was the sole investor in Luxury Retreats, which recently had a large 9-figure exit to Airbnb.

Our round also included strong participation from our existing investors Lightbank, Bee Partners, and Hedgewood — who continue to believe in our big vision — as well as a handful of strategic investors. Most notably — we are excited to add Peter Kern as an investor — who has been on the board of Expedia since 2005.

Image Credit: TechCrunch

Building a conversational commerce company

Over the past 1.5 years, chatbots sped through the Gartner Hype cycle — quickly jumping from the ‘peak of inflated expectations’ phase to the ‘trough of disillusionment’. We didn’t spend much time listening to the media hype and instead stayed focussed on the customer.

Here is what we learned:

1.Leverage the right medium based on the situation — It will be impossible to build a truly delightful customer experience by forcing the customer to chat with an AI agent / bot all the time. It is important to leverage the appropriate medium based on the situation — a chatbot, a human agent and/or a webview (with UI elements).

A. Chatbots are great for onboarding a customer. A user can quickly engage with a chatbot as it is a simple UI they are familiar with. Chatbots are also great for answering simple questions.

B. Human Agents are necessary for tricky situations. If you booked a non-refundable hotel but your flight just got cancelled due to a storm, you want to chat with a live human agent — not a chat bot! At SnapTravel — our live human agents are available 24/7.

C. A Webview (mobile web) is essential for most hotel searches. If you are a business traveler who has booked with us many times before and you make a request — we could just send you a booking form for the perfect hotel. However, if you are a first time leisure traveler deciding where on the Las Vegas strip to stay — you need a map view to visualize the location. There is no chatbot that will be able to replace that visual, interactive UI.

2.Conversational commerce is more than just the ‘conversation’ — When we think about conversational commerce — we think well beyond a ‘chatbot’ playing text message ping pong.

A. Building on top of Messenger means that we have access to a new and untapped source of distribution (discover, drawer…).

B. It means that we can engage a user without forcing them to download a new app.

C. It means we can leverage sponsored messages — one of the most untapped ad units on the platform.

D. If a user makes it to the booking form but doesn’t complete the transaction, we can retarget that user directly in their messaging inbox as opposed to trying to follow then around the web with display ads. We have seen a 30%+ jump in conversion rate with effective Messenger retargeting techniques.

3.Continuous A/B Testing is essential — The leader in the hotel booking space (Booking.com) is well known for their rigorous A/B testing platform. They are often running “in excess of a thousand experiments in parallel” transforming them into the highest converting Online Travel Agent (OTA) in the industry.

We follow the same data driven approach when it comes to building product at SnapTravel. Because chatbots are such a new space with new user behaviors, we are not opinionated about product features. Instead, we let the data and customer interactions guide us towards building the best experience over chat.

Similar to Booking.com, we have invested in internal tools that allow us to run hundreds of tests in parallel, anything from messaging frequency, tone and length to web ui fonts, colors and interactions. Due to our relentless focus on data driven experiments, we’ve seen a 2x higher conversion on mobile compared to traditional bookings websites.

4.Delight the customer — One of the benefits of working with a traditional travel agent is the personal service and attention you get. However, no one has the time anymore to walk into a travel agency, or even pick up the phone to call. At SnapTravel, we have invested significant resources in delighting our customers — providing 24/7 human agents/customer service over messaging. For every hotel booking we make, a human agent will call the hotel the morning of check-in to negotiate a free upgrade! Our customers are delighted to get a message like this on the morning of their trip: “Hello Jon — hope you are excited for Las Vegas! We called the Bellagio and got you upgraded to a suite at no extra charge. Enjoy your stay!”

We have taken the speed and convenience of booking with an OTA, the benefits and service of booking with a traditional travel agent, and added a sprinkle of messaging magic to create the absolute best way to a book a hotel!


What this funding means for us

With this new funding in place — it is time for us to double down on the technology.

We are continuously improving our Natural Language Processing (NLP) capabilities so that we can reduce the reliance on human agents and scale up. We are building world-class machine learning models to help surface the perfect hotel to a customer every single time. This will allow us to build trust with the consumer and get them from needing a hotel to booking the perfect vacation with as little effort as possible.

Here is the goal. A user should be able to access SnapTravel — type or say something like ‘I’m going to New York next week Wednesday for a night, and need a room at the usual spot’. We should be able to understand this, send the customer a ‘booking form’ for the perfect hotel. The user then pays and confirms in just a few clicks via native Messenger payments and receives automatic upgrade notifications on the day of check-in without ever involving a human.

Building a world-class engineering team

In order to reach our technology goals, we have been aggressively hiring engineers from Google, Facebook, and other leading tech organizations. We are building a world-class engineering team right here in Toronto — and now is the best time to do it. The Toronto tech community is fantastic. The DMZ and Cossette Labs even provided us with free office space to support us until this point. It is now time for us to take the next step in our growth.

Toronto is establishing itself as a hotbed for machine learning and artificial intelligence, originating from the legendary Geoff Hinton. The government of Canada just announced a new program that will issue work permits for high-skilled workers in 2 weeks (as opposed to a year). We’re always looking to work with talented folks who are passionate about defining new user experiences. If you would like to help revolutionize commerce and travel, you can learn more about our open positions here.


Try SnapTravel by going to www.snaptravel.com or simply open Facebook Messenger and search for SnapTravel — the same way you would search for a friend.

Watch a 20-second video demo here: