Travel Tech Essentialist #60: Why Now?
Having a strong why now helps startups become enduring businesses, but don’t worry too much if you don’t (#1). Read #2, and you’ll probably think of quick website improvements that you can implement today. To get the most out of your investors, it’s in your best interest to send effective investor updates (#3). David Sachs gives us some good rules of thumb for SaaS org charts (#5). Given the fundraising (#9) and M&A activity (#10), this is a busy summer in the travel tech sector, but I hope you’ll find time to enjoy and take some time off this summer.
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1. It matters for startups to have a strong "why now"
Having a strong “why now” certainly gives you a better shot at building a large and enduring business, but as Lenny Rachitsky points out, it isn’t absolutely essential. Some of his conclusions when thinking about this issue:
You can build a massive business without an immediate why now
There are five sources of why now
Your why now can emerge later
You can still absolutely fail with an amazing why now
Below is my adaptation of Lenny’s framework to the travel sector, with some examples of companies. Interested to know what you think.
If you want to suggest other examples that fit into each of the 5 categories, please comment below or via Twitter
2. Because users don’t really care about what you sell
This twitter thread from Matt Maiale offers practical and visual (before and after) advice that you can put in place today to improve the effectiveness of your website/app.
3. Sending investor updates
In this guide, you will find actionable tips and templates for sending effective investor updates. Investors want (and need) you to succeed, and investor updates can be a great tool to leverage your investors' network, experience and resources. In other words, help them deliver on their promise of giving you smart money, not just money.
4. Fintech unicorn Revolut launches a travel booking product
If travel companies are becoming more Fintech-like, maybe Fintech companies are sensing a business opportunity in launching travel products themselves. UK-based banking app Revolut launched a new travel product called Stays that allows customers to book trips and receive 10% instant cash back. Stays is the first step in the company’s plans to create a one-stop shop for travel, and an attempt to expand into becoming a Super App. The company revealed its long-term plan to add more travel-related products such as flights, car hire and travel experiences. Founded in 2015, Revolut recently raised a $800 million Series E round, valuing the company at $33 billion and making it the UK’s most valuable fintech. Read + Silicon Republic.
5. SaaS startup org chart and rules of thumb
David Sacks is GP and founder of Craft Ventures. Previously, he was the founding COO of PayPal and founder/CEO of Yammer. His angel investments include Airbnb, Facebook, Uber, and SpaceX. David wrote a post called The SaaS Org Chart which gives actionable staffing advice to SaaS founders who have just raised a round. How much should they hire, what roles should they hire, and what should the org chart look like? He provides target org charts for Series A, B, or C stage SaaS startups. He also gives ARR per employee indicators for various stages until IPO as well as functional ratios (how many developers per PM, per DevOps per designer; designers per UX; % G&A : % R&D : % S&M, etc…). While there is no one-size-fits-all org chart, these frameworks and rules of thumb can be helpful as a starting point.
6. Business trips are coming back faster than expected in the US
In-person conferences are back sooner than anticipated. About 50% of attendees at a large annual meeting of accountants in July were expected to make the trip to Las Vegas, substantially more than the organizers anticipated at the start of the year. And some conferences planned in the fall have a full pre-pandemic flavor, with almost all of the speakers and attendees planning to be on site rather than over Zoom. But corporate travel still has long way to go: it’s running at 30% to 35% of pre-pandemic levels, according to JPMorgan Chase & Co. Read + Bloomberg.
7. HomeToGo merges with Lakestar SPAC
Earlier this year, Klaus Hommels (founder of VC Lakestar) launched a €275 million SPAC (Lakestar SPAC I) aimed at merging with a European late-stage tech company worth between €750 million and €4 billion. Last week, it was confirmed that the target will be HomeToGo, a Berlin-based metasearch for vacation rentals founded in 2014. HomeToGo will go public in the German stock market by merging with Lakestar SPAC I, at an equity value of €1.2 billion. HomeToGo had gross bookings of €1.3 billion in 2020 and broke even at an adjusted EBITDA level. It makes 70% of booking revenues via its own site. Read + Reuters. According to the FT, Just three SPACs were launched in Europe in 2020, raising $500 million, compared with 244 in the US for more than $80 billion. Activity in Europe has picked up in 2021, with 21 SPACs that have raised $5.4 bn (in the US, 365 SPACs and $106 bn).
8. On the light side
I thought this was pretty funny :-)
SoftBank invests $1.7 billion into South Korean travel supper app Yanolja.
Indian hospitality unicorn OYO raised debt funding worth $660 million from global institutional investors, including Fidelity Investments.
Swedish electric aviation startup Heart Aerospace raises $35 million Series A and gets order from United and Mesa Airlines for 200 aircraft. Bill Gates’ Breakthrough Energy Ventures,United’s venture arm and Mesa led the round.
Israely-based Bookaway, a platform for ground and sea transportation, closes a $35 million Series B round, and creates Bookaway Group. The first two brands to become part of the group are GetByBus and 12Go.
Miles, a California-based startup that describes itself as a “universal rewards platform for all forms of travel” raised $12.5 million in Series A funding from JetBlue Technology Ventures and other investors.
Paris-based flights specialist OTA Misterfly raises $10 million (in French) from Bpifrance
Nethone, a Poland-based startup that provides fraud protection technology for travel suppliers raised $6.7 million in Series A funding from Plug & Play and other investors.
France-based insurtech startup, Setoo announced it is entering into a merger agreement with Pattern, an insurtech startup that is coming out of stealth mode. The joint company will operate across Europe and the U.S. under the name of Pattern.
Airline and airport tech provider SITA bought fellow French travel brand Safety Line.
Expedia Group sells hotel operations platform Alice. Read +.
P.S. Last week I shared a document that Mario Gavira and I worked on with the 11 essential trends that we think are reshaping the online travel industry. Re-sharing it in case you did not get to see or open the previous newsletter: Online Travel Trends Report
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