Global travel continues to gain momentum, with the World Travel and Tourism Council predicting industry revenue will exceed $11 trillion this year. Consumers are moving away from so-called “revenge travel” in the wake of COVID-19, and are allocating a higher percentage of their budgets to a wider range of experiences away from home. The addition of AI has renewed investor interest in startups that are disrupting the world with something new.
Aboard the travel train, Berlin-based Tourlane, an agency-like platform that allows users to plan and budget their trips by bundling flights, accommodation, activities and tickets, has raised new funding. The company raised 25 million euros ($26 million) in hopes of About those trends.
The Series D, led by Sequoia Capital, is intended to bridge the company to profitability, Tourlane CEO and co-founder Julian Weselek told TechCrunch. The startup will also use the funding to expand its technology, double down on AI and potentially expand into more originating markets beyond its current base in France and Germany.
Investing in AI may be a notable detail. Weselek said the company is introducing generative AI around the front end of its services, building a more intuitive way to guide users through their choices for what they want.
But that doesn't mean a complete replacement for humans, he said. “Is it possible to build technology that provides fully automated offers to customers? Yes, it's certainly possible,” Weselek said. “I think the question is, if you knew your marriage depended on your next vacation, would you do it?” [that, or] Would you like to speak to someone staying in this country to approve your reservation? ”
Tourlane is also betting big on the back end. AI evaluates thousands of combinations of flights, accommodations, cars, activities, time of year, and other variables to maximize your chances of getting what you want. And Tourlane will also increase their income as a result.
Weselek added that the company has about 500 employees, about 150 of whom are customer agents. He said that number is “decreasing” as a “relative number” compared to the number of customers each agent supports. “They're becoming more efficient.”
Beyond AI, perhaps just as important for Tourlane is the issue of scale. Founded in 2015, the startup is now nearly 10 years old and says it has booked trips for 100,000 people so far (each person included in a booking counts as an individual).
It also serves more customers. Weselek said last year was five times better than last year before the coronavirus outbreak.
Still, 100,000 isn't that big of a number, comparatively speaking. The number of global travelers is estimated to reach a total of 790 million people in the first seven months of 2024, according to United Nations statistics.
And it's unclear what the payoff will be for Tourlane. Like traditional travel agencies, Tourlane collects commissions for the services it sells, but it won't disclose how much, saying the fees vary based on a variety of factors and partners.
Nevertheless, this is clearly a bet that Sequoia Capital feels is worth taking. The venture is now Tourlane's largest external investor.
“This is a unique moment in travel history. Thanks to AI, every traveler has the opportunity to see the world through a personalized and custom travel experience,” said Sequoia Partner Andrew, who led the investment. Reed said in a statement. “Tourlane is positioned to delight millions of travelers in the years to come.”
Sequoia is an interesting name to have on the cap table, given the storied venture's past success in the travel space. Past investments include Airbnb (one of its early investors and Sequoia was one of its biggest winners during its IPO), Skyscanner (one of Sequoia's first investments in Europe and now Trip .com), Klook, and Kayak (now part of Booking), as well as many other small startups in the space.
Other investors participating in the Series D include Target Global (new backer), Jared Smith (co-founder of Qualtrics), and HV Capital.
Tourlane hasn't disclosed its current valuation, but for context, the last time it raised money (a $20 million Series C extension round) it was valued at $242 million, which is the initial series It was the same as C's valuation of $47 million. The first tranche of its Series C round closed months before the pandemic hit, and the second tranche closed during the pandemic, allowing Tourlane to raise money to last until people could travel again. .
Perhaps because of the rollercoaster Tourlaine has been through, or perhaps because valuations have been conservative this time around, Mr. Weselek said the numbers are not his focus or priority.
“Company valuations in the private market are highly volatile and are strongly influenced by several external factors that are beyond our control, such as cost of capital, investment hype cycles, and perceived risk levels,” he said. Ta. “What is important for us right now is the fact that we have successfully secured €25 million in funding from world-class investors. If our ambitions are successful, we will create significant shareholder value in the coming years. ”