April 29. In a clear sign that the capital markets believe that the travel market is warming up, venture capitalists are pumping hundreds of millions of dollars into corporate travel start-ups in the belief that business trips will rebound in 2021.
On Thursday, Barcelona-based TravelPerk announced it had raised $160 million in a new funding round. The investment comprised of both fresh equity and debt financing, and was led by Greyhound Capital. TravelPerk helps small and medium-sized enterprises book flights and manage their expenses through its online platform.
And it’s not the only business travel platform picking up large sums of cash. In January, California-based TripActions raised $155 million at a $5 billion valuation, up from $4 billion in mid-2019.
“The reality is travel is coming back,” CEO and co-founder Avi Meir told CNBC in an interview on Thursday. “It’s not a belief anymore, it’s actually visible in the numbers.”
In the U.S., for example, TravelPerk has seen a 70-75% recovery in domestic flights compared to pre-pandemic levels, Meir said. “Most flights are not 100% full yet but we’re talking about an industry that was 10-15% exactly one year ago,” he added. “Going from 10-15% of baseline to 75% shows the trend is definitely up.”
The travel industry as a whole was hammered by the coronavirus pandemic last year, as governments took measures to curb the spread of Covid-19 across borders. But some investors are betting on a resurgence in international travel as vaccine rollouts get underway and public health restrictions are gradually being lifted.
Meir says TravelPerk took a “very different path” to other travel firms which slashed thousands of jobs in an effort to cut costs and survive the Covid crisis. “We didn’t do layoffs,” he said, adding the company maintained robust customer support operations “to be there waiting for the storm to pass.” As a result, Meir says, TravelPerk even managed to grow its customer base by 80% in 2020.