Personal blog of Yzmir Ramirez

The coronavirus demand crunch has taken another bite: Palo Alto-based corporate travel-focused unicorn TripActions has confirmed laying off hundreds of staff.

Per this post on Blind — written by someone with a verified TripActions email address — the company laid off 350 people. Business Insider reported the same figure yesterday, and the Wall Street Journal said the layoffs amount to between one-quarter to one-fifth of the startup’s total staff, citing a person familiar with the situation.

Update: A spokesman for TripActions told us the number of impacted employees impacted is “less than 300” — although he qualified the remark by saying the figure includes 25 people who were offered other roles within the company.

In an earlier email to Crunchbase News TripActions confirmed axing jobs in response to the COVID-19 global health crisis — saying it had “cut back on all non-essential spend.” It did not confirm exactly how many employees it had fired at that point.

“[We] made the very difficult decision to reduce our global workforce in line with the current climate,” TripActions wrote in the statement. “We look forward to when the strength of the global economy and business travel inevitably return and we can hire back our colleagues to rejoin us in our mission to make business travel effortless for our customers and users.”

“This global health crisis is unlike anything we’ve ever seen in our lifetimes, and our hearts go out to everyone impacted around the world, including our own customers, partners, suppliers and employees,” it added. “The coronavirus has had [a] wide-reaching effect on the global economy. Every business has been impacted including TripActions. While we were fortunate to have recently raised funding and secured debt financing, we are taking appropriate steps in our business to ensure we are here for our customers and their travelers long into the future.”

Per the post on Blind, TripActions is providing one week of severance to sacked staff and medical cover until end of month. “With [the coronavirus pandemic] going on you think they would do better,” the OP wrote. The layoffs were made by Zoom call, they also said.

However TripActions’ spokesman disputed the details about severance and medical cover, saying it is offering severance packages for U.S. employees that include two months of company-paid COBRA health insurance coverage, extending health benefits through the end of June, along with a minimum of 3 weeks salary.

He added that U.S. employees who were given notice yesterday were told their last day would be April 1, 2020 — meaning their health benefits continue through the end of April.

Travel startups are facing an unprecedented nuclear winter as demand has fallen off a cliff globally — with little prospect of a substantial change to the freeze on most business travel in the coming months as rates of COVID-19 infections continue to grow exponentially outside China.

However, TripActions is one of the highest valued and best financed of such startups, securing a $500 million credit facility for a new corporate product only last month. At the time, Crunchbase recorded $480 million in tracked equity funding for the company, including a $250M Series D TripActions raised in June from investors including a16z, Group 11, Lightspeed and Zeev Ventures.

Before the layoffs, the company had already paused all hiring, per one former technical sourcer for the company writing on LinkedIn.

This post was updated with additional comment from TripActions

Business customers continue to be a huge target for the travel industry, and today a startup has raised a tidy sum to help it double down on the $1.7 trillion opportunity. Lola.com — a platform for business users to book and manage trips — has raised $37 million to continue building out its technology and hire more talent as it takes on incumbents like SAP targeting the corporate sector.

The Series C is led by General Catalyst and Accel, with participation from CRV, Tenaya Capital and GV. All are previous investors. We are asking about the valuation but it looks like prior to this, the company had raised just under $65 million, and its last post-money valuation, in 2017, was $100 million, according to PitchBook.

There are signs that the valuation will have had a bump in this round. The company said in 2018, its bookings have gone up by 423 percent, with revenues up 786 percent, although it’s not disclosing what the actual figures are for either.

“As business travelers have become increasingly mobile, Lola.com’s mission is to completely transform the landscape of corporate travel management,” said Mike Volpe, CEO of Lola.com, who took the top role at the company last year. “The continued support of our investors underscores the market potential, which is leading us to expand our partner ecosystem and double our headcount across engineering, sales and marketing. At the core, we continue to invest in building the best, simplest corporate travel management platform in the industry.”

Co-founded by Paul English and Bill O’Donnell — respectively, the former CTO/co-founder and chief architect of the wildly successful consumer travel booking platform Kayak — Lola originally tried to fix the very thing that Kayak and others like it had disrupted: it was designed as a platform for people to connect to live agents to help them organise their travel. That larger cruise ship might have already said, however (so to speak), and so the company later made a pivot to cater to a more specific demographic in the market that often needs and expects the human touch when arranging logistics: the business user.

Its unique selling point has not been just to provide a pain-free “agile” platform to make bookings, but for the platform’s human agents to be proactively pinging business users when there are modifications to a booking (for example because of flight delays), and offering help when needed to sort out the many aspects of modern travel that can be painful and time consuming for busy working people, such as technical issues around a frequent flyer program.

Lola.com is not the only one to spot the opportunity there. To further diversify its business and to move into higher-margin, bigger-ticket offerings, Airbnb has also been slowly building out its own travel platform targeting business customers by adding in hotels and room bookings.

There are others that are either hoping to bypass or complement existing services with their own takes on how to improve business travel such as TravelPerk (most recent raise: $44 million), Travelstop (an Asia-focused spin), and TripActions (most recently valued at $1 billion), to name a few. That speaks to an increasingly crowded market of players that are competing against incumbents like SAP, which owns Concur, Hipmunk and a plethora of other older services.

Lola.com has made some interesting headway in its own approach to the market, by partnering with one of the names most synonymous with corporate spending, American Express, and specifically a JV it is involved in called American Express Global Business Travel.

“Lola.com offers an incredibly simple solution to corporate travel management, which enables American Express Global Business Travel to take our value proposition to even more companies across the middle market,” said Evan Konwiser, VP of Product Strategy and Marketing for American Express GBT, in a statement.

TravelPerk, a Barcelona-based SaaS startup that’s built an end-to-end business travel platform, has closed a $21 million Series B round, led by Berlin-based Target Global and London’s Felix Capital. Earlier investors Spark Capital and Sunstone also participated in the round, alongside new investor Amplo.

When we last spoke to the startup back in June 2016 — as it was announcing a $7M Series A — it had just 20 customers. It’s now boasting more than 1,000, name-checking “high growth” companies such as Typeform, TransferWise, Outfittery, GetYourGuide, GoCardless, Hotjar, and CityJet among its clients, and touting revenue growth of 1,200% year-on-year.

Co-founder and CEO Avi Meir tells us the startup is “on pace” to generate $100M in GMV this year.

Meir’s founding idea, back in 2015, was to create a rewards program based around dynamic budgeting for business trips. But after conversations with potential customers about their pain-points, the team quickly pivoted to target a broader bundle of business travel booking problems.

The mission now can be summarized as trying to make the entire business travel journey suck less — from booking flights and hotels; to admin tools for managing policies; analytics; customer support; all conducted within what’s billed as a “consumer-like experience” to keep end-users happy. Essentially it’s offering end-to-end travel management for its target business users.

“Travel and finance managers were frustrated by how they currently manage travel and looked for an all in one tool that JUST WORKS without having to compare rates with Skyscanner, be redirected to different websites, write 20 emails back and forth with a travel agent to coordinate a simple trip for someone, and suffer bad user experience,” says Meir.

“We understood that in order to fix business travel there is no way around but diving into it head on and create the world’s best OTA (online travel agency), combined with the best in class admin tools  needed in order to manage the travel program and a consumer grade, smart user experience that travelers will love. So we became a full blown platform competing head on with the big TMCs (travel management companies) and the legacy corporate tools (Amex GBT, Concur, Egencia…) .”

He claims TravelPerk’s one-stop business trip shop now has the world’s largest bookable inventory (“all the travel agent inventory but also booking.com, Expedia, Skyscanner, Airbnb… practically any flight/hotel on the internet — only we have that”).

Target users at this stage are SMEs (up to 1,500 employees), with tech and consulting currently its strongest verticals, though Meir says it “really runs the gamut”. While the current focus is Europe, with its leading markets being the UK, Germany and Spain.

TravelPerk’s business model is freemium — and its pitch is it can save customers more than a fifth in annual business travel costs vs legacy corporate tools/travel agents thanks to the lack of commissions, free customer support etc.

But it also offers a premium tier with additional flexibility and perks — such as corporate hotel rates and a travel agent service for group bookings — for those customers who do want to pay to upgrade the experience.

On the competition front the main rivals are “old corporate travel agencies and TMC”, according to Meir, along with larger players such as Egencia (by Expedia) and Concur (SAP company).

“There are a few startups doing what we are doing in the U.S. like TripActions, NexTravel, as well as some smaller ones that are popping up but are in an earlier stage,” he notes.

 Rocketrip believes you can motivate employees to spend less on business travel by rewarding them with gift cards. For each trip, the startup establishes a “budget to beat” and helps employees split the savings with the company.
The concept gained early traction and now New York-based Rocketrip is raising an additional $9 million in funding led by Bessemer Venture Partners with… Read More