WeTravel book $27 million to build fintech and more for tailored group travel • TechCrunch

Travel is back on the radar for investment, with both consumers and business users on the move again after a long pandemic period of staying in one place. Today, a startup called WeTravel — which builds technology for the specific needs of group travel — raised $27 million, money it will use to expand its business after strong growth over the past year.

The company supplies payments and other tools to around 3,000 companies, and trains 500,000 customers who use the platform. Transaction volumes have grown by 30% and revenues are currently 3 times higher than before Covid. And CEO and co-founder Johannes Koeppel said he believes those numbers will double again by 2023 “as a conservative estimate.”

Series B is led by Left Lane Capital, with previous backers Swift Ventures and Base10 also participating alongside angel investors that include Victor Jacobsson, one of the co-founders of Klarna.

WeTravel had previously raised just $7 million in the 8 years since it was founded. We understand from sources that this Series B was made at a value of just over $100 million.

Appropriately enough, the start-up has traveled a bit itself. Originally, Keoppel and his two co-founders Garib Mehdiyev (CTO) and Zaky Prabowo (CMO) had moved out of the Netherlands to the Bay Area to start the business, only to find it impossible to navigate the visa waters to bring engineers and other technical talent over, also. So in 2019, WeTravel’s three founders moved back across the pond to the Netherlands. Covid appreciated the idea that a startup needs to have its team in one place, and today the majority of the company’s business team and customers are in the US and it is incorporated there, while the three founders, as well as WeTravel’s product and engineering team, are all in Amsterdam.

The gap in the market WeTravel is going after is one that ironically seems to have been created with the growth of online travel services.

In the old days before the internet, travel agencies ruled when it came to booking tickets and general vacations for many consumers and businesses, both as individuals and groups. Online tools have changed the game for individuals, but interestingly the same is not true for groups looking to book, say, a multi-day trip or retreat that may involve multiple hotels, activities and food, which may involve multiple people, multiple locations, potentially hundreds of vendors (not just hotels and airlines, but restaurants, excursion operators, insurance providers and much more), and the need for flexible payment options – different people pay different amounts, payments in installments and lump sum payments which in turn need to be specified across different providers.

“The important bit is not so much about paying, but what happens afterwards,” said Keoppel, “what the travel company has to do with those funds. A typical trip might cost $10 for the user, and the vast majority of that goes to suppliers . It’s about fund management. And the more involved the trip, the greater the number of suppliers from restaurants and transport companies to airlines and hotels and more.” On top of that, there are bank fees and different payment methods from company to company, country to country.

WeTravel’s platform covers two main parts of this process: helping those putting the group together organize suppliers and plan everything; and then handle the different aspects of the payment process, whether it involves setting up payments in installments, or working with different currencies and payment methods, and paying out to different suppliers under their individual terms.

Keoppel describes the fintech side of the business as “PayPal for travel” and says it is complex enough that companies like PayPal, Stripe and other big names in online payments have not been able to address the particular segment of the market that WeTravel serves, especially when used with the first part of the product set to coordinate itineraries and suppliers.

Keoppel believes this is a template we may see more of in the B2B fintech world. “My belief is that in the next couple of years there will be more specific SaaS platforms that integrate payments as a component for specific industries,” he said. (In fact, today you already have something to address this for, say, beauty and wellness, with companies like Fresha, Boulevard, and Style Seat building tools specifically for the needs of that vertical.)

This is also something WeTravel’s customers have also sometimes tried, but failed to build themselves. As travel agencies have become “travel advisors” and focus on these customized travel experiences, some have turned, he said, to “custom systems they build themselves, but what I’ve realized is that what’s missing is the end-customer experience. They don’t have time for building the beautiful invoicing system plus payment methods, and everything else.”

One thing WeTravel doesn’t currently do is offer discovery to its users – meaning travel advisors can still turn to their little black books, or these days perhaps TripAdvisor, Yelp or other recommendation and discovery platforms to find interesting restaurants and more . This is something WeTravel could potentially move into as it grows.

“A significant elephant in the room is what happens when other major travel platforms consider how they can do more in this area: they already have all the major vendor relationships, and it may be a matter of building or buying tools to meet this use case.

Vinny Pujji, who led the investment for Left Lane, recalled that his parents once ran a travel agency, “so this was cool for me to see,” he said. “You run into sneaky big markets, and this is certainly one of them.”

He noted that the Covid winter that fell on travel appears to be thawing, even in the current economic climate.

“The data tells us that travel is largely back now,” he said. He points out that the company has grown 3 times since 2019, and emphasizes that WeTravel in particular may have proven the axiom if a start-up can get through the pandemic, it can make it to a full stop. “Church groups, students, there are more stable income streams here than just stag parties.”