Airbnb’s valuation hit new highs when it debuted in public markets, even during the pandemic kept income depressed.
Now another unicorn startup focused on the travel space is also on the rise: TripActions, a maker of travel and business spending software, has announced that it has raised $ 155 million in funding On Thursday, its valuation jumped from $ 4 billion in 2019 to $ 5 billion today, even though revenues remain below pre-pandemic levels. Series E was directed by Andreessen Horowitz, Lee Fixel’s Addition companiesand investor Elad Gil. Zeev Ventures, partners of Lightspeed Venture, and Capital Greenoaks also participated.
It’s an uprising that would have been hard to imagine at the start of the pandemic. Several startups in the space took steps to cut spending, and TripActions was fired a quarter of its 1,100 employees bookings and use by its customers having fallen by 90%.
But now the vaccine has shown investors a light at the end of the tunnel, creating a window of time to buy travel startups as they believe companies in the industry are undervalued.
It’s part of the thinking that led Gil, a longtime Airbnb investor, to co-lead the round. The investor pointed to Warren Buffett’s famous quote: “Be fearful when others are afraid,” adding that he believes travel will likely rebound by 2022 or even the end of 2021.
By focusing on acquiring large customers and launching new features, including one that analyzes the company’s spending in general and one that allows customers to check for viruses in travel regions, TripActions has convinced his investors that he can be a winner after the pandemic, even though his income was just 60% in the year ending January 2021 compared to his days before the virus. And while revenues are declining, its total “business book,” a number that effectively represents total transactions through TripActions, has fallen from $ 2.1 billion to $ 3.6 billion over the past year. same period. (“TripActions also performed very well during these difficult times. When I think of travel, the two companies that stood out were Airbnb and TripActions,” says Gil.)
For TripActions, its future business is not just about overcoming the pandemic. The company is also betting that business travel trends will fundamentally change even under the most optimistic scenarios. Anticipating that the trend of remote working will continue even if the virus is eliminated, TripActions CEO Ariel Cohen said the company plans more group travel as the diaspora workforce seeks to meet quarterly or every week.
“Due to working from home and a more dispersed workforce, [we believe there could be] no more team meetings, ”Cohen says. “We think there will be a bigger shift around business travel.”
Previously focused more on mid-sized companies, TripActions has signed agreements with Netflix, GameStop, and Rivian in 2020. I couldn’t help but ask: Was TripActions focusing on customers who he said were prone to travel, even during the pandemic?
To some extent, yes, Cohen says. But he is focusing more on companies that he says will travel in the long term. Take the example of electric car maker Rivian: “When you develop a car, you have to travel – that was our assumption.”