Helping avoid flights of fancy, venture disrupts business travel

Business travel is a massive market, with $1.2 trillion spent globally every year, according to the Global Business Travel Association. Yet many companies still use outdated technology, and in some cases actual humans, to book travel for their employees.

Booking any trip online can be complex, but booking a business trip online is more so, requiring integration of company policies with supplier relationships: hotels, airlines and car-rental companies.

Where consumers have the convenience of applications like Booking.com and Expedia, business travelers have clunky corporate tools or in-house travel administrators, who, in turn, have travel-management companies and travel agencies, not convenient apps.

Business travelers and their admins can often spend more than an hour booking a trip.

So corporate travel is wide open for disruption and entrepreneurs are taking notice. A number of startups have launched with apps to digitize business travel and remove the human element.

They can make securing a business trip as easy as booking a personal vacation with Kayak or Priceline. And they align corporate goals, such as saving money, with the travel preferences of employees.

For instance, the apps remember employees’ micropreferences, like window seat or aisle, room on a high or low floor, TSA PreCheck or not.

A 2017 study by SurveyMonkey found half of workers feel stressed or indifferent about traveling for business and 37 percent feel burnt out, frustrated or unmotivated when they go back to work from a business trip.

Startups that can reduce this wear and tear can significantly improve employee productivity and retention. Here are three key ones:

Aligning with ‘rogue’ employees

More business travelers these days are going rogue and booking on their own. They’re ignoring company tools and policies, and are choosing their own hotels and flights to build reward points for themselves.

And their choices often don’t match the corporate goal of strengthening the bottom line.

Rocketrip aims to fix this. “Loyalty programs have created an incentive for employees, as travelers, to gravitate to deals that may not be in the best interest of the employer, just to get additional points in their personal loyalty programs, even when they’re paying a higher rate,” said Alex Ferrara, a partner at Bessemer Venture Partners, which invested in Rocketrip’s recent $15 million Series C round, led by GV.

VCJ Venture Corporate Travel Sector Trend
Alex Ferrara, partner, Bessemer Venture Partners. Photo courtesy of the firm.

“Rocketrip allows alignment of employee interests and employer interests.”

An employee who is traveling logs into Rocketrip, which figures out how much the trip should cost, on average, based on real-time data and company policies.

Then the employee books her trip, and if she manages to do it for less than the Rocketrip target price, she pockets half the savings, paid in points she can convert to cash or gift cards.

Employees using the platform earn an average of $119 in rewards per trip, the company says, while employers save $208 on the average business trip Rocketrip books.

Rocketrip also aims to make travel less stressful for employees. The platform pulls historical data from its customers and uses it to analyze travel patterns and preferences.

Then it makes flight and hotel recommendations to employees so they have more enjoyable trips. If it knows that another employee at your company liked a certain hotel in a certain city, it recommends that hotel to you.

Rocketrip is pursuing Fortune 2000 companies, those with very high travel costs. Rocketrip says it can save them a lot of money.

Rocketrip’s concept “resonates with CFOs,” Ferrara said. “We thought it would take years to get the attention of Fortune 500 companies, but we got interest right away because they see the value proposition.”

Rocketrip makes money from gift-card vendors, which use it to acquire new customers, and from travel vendors. If an employee uses a partner site like, say, Travelocity, to book travel, Rocketrip makes a commission.

As for exits, Ferrara says companies like Booking.com have reached a scale where they’ll have to look for large new markets to grow further. Corporate travel is a large market directly adjacent to their current business.

Easing the travel process

Booking business travel can be a real pain in the seat. That’s a key reason so many employees dodge their employers’ tools and travel-management partners.

Company-travel administrators don’t have this option. They’re stuck comparing rates with Skyscanner, getting redirected to a bunch of different websites, then sending a bunch of emails back and forth with a travel agent to coordinate the trip.

What they want is a simple tool that works. Enter TravelPerk, a Barcelona SaaS startup offering an end-to-end business platform. It includes flight and hotel booking, admin tools for managing corporate policies, analytics and customer support, all within a “consumer-like experience” to make employees want to use it.

“Corporate travel is one of the largest global markets yet to be disrupted online,” said Antoine Nussenbaum, partner at London’s Felix Capital, which led TravelPerk’s $21 million Series B round.

“But to [digitize] it, you have to succeed not only in digitizing the consumer experience but also the travel booker and compliance experience.

VCJ Venture Corporate Travel Sector Trends
Antoine Nussenbaum, partner, Felix Capital. Photo courtesy of the firm.

“Then, to make a seamless experience, you have to combine the employee experience with the requirements of the CFO, who has to make sure everyone is on budget and all the company’s travel policies are embedded in the tool, as well as all the invoicing and accounting.”

TravelPerk has a freemium model. It promises to save customers 20 percent vs. legacy corporate tools and travel agents because it charges no commissions and offers free customer support.

It also has a premium tier with perks like corporate hotel rates for those customers willing to pay for an upgrade. The company has over 1,000 customers and is growing.

Putting it all together

TripActions offers rewards for road warriors who save on their travel, like Rocketrip, and an end-to-end consumer-friendly experience, like TravelPerk. It also offers 24-hour customer support for travelers when they need assistance with, say, a flight delay.

TripActions just raised $51 million in a Series B round led by Lightspeed Venture Partners.

Arif Janmohamed, a Lightspeed partner who invested in TripActions, says the startup is able to deliver an average 27 percent savings across its customer base.

TripActions “begins with booking and handles the entire travel experience,” he says. “It starts when you search for travel and offers personalization and rewards to save money for both the user and the company. It also extends into first-class support should the traveler need it.”

“Corporate travel is a complicated space, so it’s not an area where a lot of people were paying attention,” Janmohamed says.

That’s quickly changing.  After all, in a trillion-dollar industry, the rewards are there for the taking.

Tom Stein is a VCJ correspondent from Palo Alto, California. He can be reached at tom.stein@yahoo.com.