The tourism and travel industries have been one of the companies hardest hit by the global Covid-19 health pandemic, and today a promising startup in the field announced some funds to help weather the storm. Berlin-based Tourlane, which has built a platform that mimics the role of a personal travel agent in planning and booking all aspects of multi-day travel for individuals and small groups, has raised $ 20 million in what is being referred to as an extension of its 2019 Series C.
The money will be used to provide Tourlane, in his own words, with “financial stability; This allows the company to pursue its customer-centric vision of creating an end-to-end experience for booking unique one-way trips based on advanced technology and travel expertise. "
As far as we know, the company has seen a sharp drop in bookings due to numerous travel bans, reduced flight schedules and stay-at-home orders in different countries as it tries to deal with the coroan virus outbreak with 20% booking rate over the same Time last year.
The Series C originally cost $ 47 million – that was $ 67 million total – and was jointly led by Sequoia Capital – which is currently making a major push to Europe itself – and Spark Capital. These two VCs participated in the extension along with other existing investors DN Capital and HV Capital and both founders. Tourlane has now raised over $ 100 million.
As far as I know, the expansion comes at the same valuation – which, according to PitchBook (and my sources), is around $ 242 million.
A press release announcing the extension did not contain any metrics. In addition to alluding to financial stability, the undercurrent of the message is just to make sure the company has the resources to handle this and possibly turn the situation into a positive one for the company (however that may be possible like).
"We strongly believe that this pandemic is an opportunity to rethink travel and will be a catalyst for Tourlane's business model," said Julian Stiefel, Co-CEO and Co-Founder of Tourlane (the other co-founder and co-CEO is this) another Julian, Julian Weselek). "With this final round of financing, we are continuing to invest in our technology and product experience while guaranteeing maximum flexibility for our customers."
This isn't too far outside of the bigger trend among other startups in the industry, and a relatively good result compared to some. In fact, Tourlane funding follows a number of twists and turns in the broader category of startups focused on travel and tourism. It was only this week that Airbnb filed its long-awaited IPO prospectus, which – while still a big deal – saw the company suffer a huge drop in sales after many people canceled travel plans.
Others were not doing so well. Domio (another player in the lodging space) is reportedly about to close his business after raising well over $ 100 million. Trip Actions, Zeus Living, and Sonder have all seen major layoffs. GetYourGuide, another Berlin-based travel startup, raised $ 133 million in the form of a convertible loan to raise more money to help tackle the crisis.
At Tourlane in particular, the startup has had a rocky year since the outbreak of the pandemic, in addition to the decline in the number of bookings.
In March, the company saw a 30% increase in incoming customer service inquiries when people contacted them to cancel or rebook their trips. Not only did this mean a potential loss of revenue – Tourlane was providing reimbursements even when it was unable to secure the reimbursements from suppliers themselves – but also high operating costs for the company.
Before the pandemic, the company had around 290 employees and was growing. While it has made some layoffs – it now has around 250 – about half of the remaining employees are on a part-time leave program where they only work part-time (part of a German government program where it offers help with rework the difference).
There were also some lighter spots. During the summer, when there was a bit of a break in many places – so much so that we even saw stories of group outings among nomads who just couldn't cool their itchy feet – companies like GetYourGuide, Airbnb, and Tourlane saw activity spurts.
Tourlane offers curated travel routes and bookings to around 50 destinations. Record bookings were even seen in some places like Iceland, which was one of the few destinations where there were no major outbreaks in Covid-19 cases. Unfortunately, like so much geothermal steam, everything evaporates when the falls resume.
The hope now is that vaccines and their introduction will give people more confidence to travel again, and that governments and other organizations will have the opportunity to reduce some of the severe restrictions that have been put in place making quick escape routes completely impossible.
"When the crisis hit us earlier this year, our team put an incredible effort into adjusting the strategy, adapting to a new reality and preparing for new demand as the market recovers," Weselek said in a statement. "In these unprecedented times, the commitment of our investors is a strong signal of confidence in our strategy, the Tourlane business model and the future."
"Tourlane has a tremendous opportunity to redefine the way people experience travel," said Andrew Reed, partner at Sequoia Capital, in a statement. "We look forward to continuing our partnership in this next chapter and supporting Tourlane's technological innovation and growth in the years to come."
"We were impressed with Tourlane's ability to quickly and consistently adjust its strategy in such a turbulent year," said Christian Saller, Tourlane Chairman and General Partner at HV Capital, in his own statement. “The new investment will help move into growth mode quickly when the market recovers. We are more convinced than ever that Tourlane is perfectly positioned to create the best travel experience. "