TravelPerk CEO and co-founder Avi Meir.TravelPerk
LONDON — 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. TravelPerk declined to disclose its valuation but CEO and co-founder Avi Meir said the deal was agreed on favorable terms for the start-up and its investors.
“The reality is travel is coming back,” 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.
The recovery in travel is likely to be patchy, however. India, for example, has seen a devastating surge in cases lately, reporting more than 300,000 new infections a day in the past week. The country passed a grim milestone of 200,000 Covid-19 deaths on Wednesday. Meanwhile, Europe’s vaccine rollout got off to a painfully slow start but is beginning to gather pace.
“We’re going to live in this state of uncertainty for, I think, the next 12 months, if not longer,” Meir said.
Meir says TravelPerk took a “very different path” to