The Funding Round Was Led By Incubate Fund And Saw The Participation Of Existing Angel Investors
Shorebird Technologies, the makers of the third generation, end-to-end corporate travel management platform Tripeur, has raised $600K in Pre-Series A funding led by Japan-based Incubate Fund and a few angel investors. Angel investors from the company’s Seed round like Rajul Garg also participated in this round.
Tripeur is an end-to-end corporate travel management platform that uses advanced artificial intelligence and machine learning algorithms to drive efficiency, ease of use and customisation for business travel by employees and executives alike.
Commenting on the fundraise, Thiagarajan Rajagopalan, Founder and CEO of Shorebird Technologies told Inc42, “We are excited to lead the corporate travel space into the Third Generation by deploying latest innovations in artificial intelligence, machine learning and personalisation in various aspects of corporate travel space – be it for the traveller experience or travel desk automation or post-travel reconciliation.”
“This round of funding will help our company to further our technology lead and grow our business manifold. Our objective is to scale our top-line and achieve a 10x growth in transactions by the end of 2018. Additionally, we are focussed on AI and ML, for which we have hired a number of experts and development in this area is already underway,” he added.
Elaborating further, Thiagarajan stated that the newly-secured capital will also be used for product development and for building the sales and marketing teams, with the aim of scaling Tripeur significantly in the coming months.
To that end, Shorebird has already brought on board Manish Raj, former Vice President and Business Head of Corporate Travel Services at Via.com. In his new role as the co-founder and Chief Business Officer at Tripeur, Raj will be spearheading the company’s sales and marketing efforts.
Sharing Rajagopalan’s excitement, Tripeur’s other co-founder and COO Sajit Chacko said, “It is gratifying to see Tripeur getting wide reception in the market – from investors and customers alike. We are excited to see our transaction count double in February compared to January! With this additional investment coming in, we look forward to acceleratinf our business growth.”
During an hour-long conversation with Inc42, Thiagarajan delved into the intricacies of product, while also offering a glimpse of the company’s future plans – from breaking even operationally by the end of 2018 to becoming a pioneer of the third generation corporate travel management technology.
The Three Waves Of Corporate Travel Management And How Tripeur Was Born
Tripeur was founded in December 2015 by Thiagarajan Rajagopalan and Sajit Chacko, two technology and hospitality industry veterans. What drove them to start a venture together was the realisation that corporate travel holds an immense, largely untapped opportunity in India.
According to Thiagarajan, there are a few fundamental differences between consumer travel and business travel. He explained, “While consumer travel is focussed on an individual or one family, in business travel, a company needs to balance three different aspects: travellers’ convenience and comfort; compliance for companies and thirdly, finance, where enterprises worry about efficient cost management.”
While consumer travel has transformed quite a bit due to the emergence of the Internet and the acceptance of technology, the segment of business travel management has remained very old fashioned. The sector, Rajagopalan believes, has seen a very slow evolution which can largely be categorised into two buckets or waves: 1st generation and 2nd generation.
In the first generation, corporate travel took the form of a separate department in most companies, often called travel desks. In order to manage these travel desks, businesses generally outsourced this function to third-party travel management companies such as American Express Travel, Thomas Cook, etc.
During the first generation, however, all these functions were done manually. The problem with this arrangement was that there was no automation, visibility or even control over how things were done. Then came the second wave of evolution. In this phase, there was an emergence of Internet-based travel aggregators that enabled online bookings for corporates as well. These included Expedia, MakeMyTrip, Yatra, among others.
Thiagarajan averred, “What companies started doing was that they brought the outsource function in-house, but it was still being done by humans. From the traveller’s perspective, the process remained the same, and involved sending an email and somebody physically doing all the bookings. However, in this case, trying to optimise convenience, cost and compliance became difficult.”
With Tripeur, the entrepreneur duo wanted to disrupt this whole system with a third generation of solution.
“We asked ourselves, how do we eliminate all the manual, human-intensive work and bring everything into a technology platform?”
The answer, he recounts, was artificial intelligence and machine learning. So instead of a human doing all the bookings manually, while also trying to optimise expenses, the company created a bot-enabled system to take care of the entire process.
As explained by Rajagopalan, Tripeur is basically an end-to-end solution – from pre-trip processes like approval to making bookings to compliance and analytics and finally post-travel reconciliation and expense management – for the organisation. In addition to doing all that, the platform manages of all forms of travel expenses: flights, hotels, buses, trains, etc.
The company’s focus, as per the founding duo, was to eliminate human involvement right from the beginning. Therefore, as soon as the user’s intent is recorded, Tripeur takes that information and converts it into travel options in real-time. These options are, in turn, optimised to offer swift and personalised experience.”
“While a standard booking takes several minutes to hours, our technology cuts it down to a matter of minutes, while also complying with all the requirements present in corporate travel,” Thiagarajan claimed.
To attain this feat, the platform employs modern technology to bring ease-of-use, efficiency and personalisation to the business travel management experience. Apart from AI and ML, Tripeur uses other technologies like natural language processing and auto-profilers.
How Tripeur Is Striving To Meet The Needs Of All Stakeholders In Business Travel Booking
The Tripeur system integrates seamlessly into the company’s existing ERP system, including the HR system and the finance system. This allows the data to flow seamlessly between the system, thereby bringing efficiency to the overall organisation.
According to the co-founders, Tripeur ultimately strives to satisfy all the stakeholders of a company involved in the corporate travel booking process, including travel desk executive, employee as well as HR and finance teams.
Breaking it down for us, Thiagarajan said, “Our platform helps automate the business travel booking process. So, the traveller is happy because the experience is customised and fast. The company’s HR, on the other hand, is also satisfied because all the bookings that are made in the system are compliant with the policies.
Thirdly, the finance team has its needs met because it gets real-time analytics which, in turn, helps in expense management.
Interweaving Innovation: The Multiple Layers Of Technology Integration
The Tripeur system, essentially, consists of four layers of technology: booking engine, policy engine, reporting and analytics and finally, user experience.
The first layer, the team claims, is fairly standard and already fully operational. The second layer, which is the policy engine, requires some level of customisation. For this, the company has built a flexible system that can configure up to 90% of the policies at one go, irrespective of their complexity. For the remaining 10%, the product is sometimes extended to incorporate certain new policies.
The third layer pertains to governance, reporting and analytics. This, again, has evolved quite since Tripeur was launched commercially in June 2016. The final layer, that of user experience, relies on email, chat, online portal, etc.
Among the areas of technology integration that the team at Shorebird is focussing on, one is on the HR side of things. As shared by Thiagarajan, “Employees join organisations every week, while somebody or the other is always leaving. These directories need to be synchronised with our system, so that when an employee is leaving, his/her account should be automatically blocked. Similarly, if someone new joins, his/her account should be automatically created in our system.”
To that end, the company has created a framework that makes the process more flexible and efficient, whereby organisations can export their directories on a daily or a weekly basis. The Tripeur directory, then, automatically picks it up, processes it and makes whatever changes are applicable. The framework is currently in the process of implementation, Rajagopalan added.
The other end of the integration pertains to expenses. Once the travel is completed and all the expense reports are imported by the company’s finance system, there needs to be a certain level of automation to make the process smoother and faster.
On whether Tripeur will use the newly-raised funding to bring further innovation into its products, Thiagarajan answered, “Right now, in terms of innovation, our focus is on two areas. One is using AI and ML to provide efficiency, convenience and ease of use for the users. The second area is analytics, where we are focussing on offering insights to these organisations that would help bring down cost as well as resource usage.”
Targeting Medium To Large Enterprises To Break Even By 2018 End
At present, Tripeur’s customer acquisition process consists of four stages. The first stage is lead generation. While most of its initial growth was through organic means, the company now has dedicated digital marketing and email marketing programmes to reach out to prospective clients.
Additionally, it conducts events to get in touch with various corporates for lead generation into the company. The second stage of customer acquisition is where an in-house team converts these leads into qualified leads. This team focusses on sharing additional information and arranging meetings.
The third stage is feet on the street. In fact, as revealed by Thiagarajan, the company is in the process of building a strong sales team, whose responsibilities will include chatting with customers as well as structuring and closing the deals. The last stage is onboarding of the customers. Once the client has signed up, the platform leverages customisation and integration to fully onboard the clients.
Over the last year or so, Tripeur claims to have added between 40 to 50 companies, ranging from medium to large enterprises. Among them are DTDC, Hector Beverages, First Source, etc. Most of these companies, Rajagopalan claims, rely on it to fulfil all their travel needs.
Being in the B2B space, where margins are higher than in B2C businesses, Shorebird has been generating revenue from both customers as well as providers for over 18 months now, with positive unit economics. Its revenue is, basically, a single-digit percentage of the transaction value that Tripeur facilitates.
As a testament to its growth, the total transaction volume on the Tripeur platform nearly doubled in February as compared to January 2018.
For Thiagarajan and his team, however, the coming 10 months or so are crucial. He explained, “We expect to achieve a 10x growth in the current year, post which we will look for additional funding. By the end of the year, we also want to break even and be profitable operationally.”
That might not be very difficult since, unlike consumer businesses that require heavy investments and deep discounting to acquire customers, Tripeur’s cash burn for customer acquisition and retention is significantly lower.
Currently, the corporate travel management startup works with all the domestic airline carriers directly. In terms of hotels, it boasts 10+ partners, including consolidators, direct hotel chains and retailers/intermediaries. For buses and trains too, it claims to have partnered with multiple providers.
A Tale Of Numbers: 40 Clients, Team Of 20, Nearly $1 Mn In Funding
Headquartered in Bengaluru, Shorebird Technologies has a team of around 20 people. The number, Rajagopalan expects, will double in the next six to nine months. This is expected since the company has been aggressively expanding into Delhi and Mumbai.
In another six months, it will be setting up operations at the next set of cities such as Hyderabad, Chennai, Pune and Kolkata.
Till date, the company has raised nearly $1 Mn in funding. Earlier in June 2017, the Bengaluru-based corporate travel management solutions startup picked up around $350K in Seed funding led by Grace Techno Ventures and a clutch of angel investors.
As stated by Rajagopalan, the funds raised in the angel round last year were used to validate the proof-of-concept as well as the Tripeur platform’s capabilities. The milestones set at the Seed stage were met six months ahead of schedule, claimed the founders.
We Don’t Want To Force Technology On People: Tripeur Founder
According to a report by Google India and Boston Consulting Group (BCG), the Indian domestic travel market is poised to become a $48 Bn industry by 2020. Despite this enormous potential, the Indian online booking sector has a penetration of only around 19%, as per a report by Deutsche Bank AG.
Low online penetration, even in the corporate travel segment, was one of the major challenges Tripeur faced initially. The key to overcoming this problem, according to Thiagarajan, was to make technology an invisible ally, instead of trying to coerce its use on people.
He added, “We don’t want to force technology on people, which is what has been happening. Expectedly, there has been a lot of resistance to it as well. Instead of having users adopt technology, we make technology invisible and bring back to people. If email is more convenient for the user, we will deploy our bot to your email. If you are more comfortable with chat, we will bring it to chat.”
Another big challenge was convincing corporates to use their products. “When you start working with an enterprise as a startup, the challenge is to be able to sell your product to them properly. However, once we broke through that and had a bunch of clients on board, we didn’t face many challenges in terms of scaling the business,” Rajagopalan further stated.
For the near future, the company’s focus is two-fold: one, to grow the business exponentially. Secondly, it is also looking at becoming the pioneer and leader of the third generation of corporate travel management technology.
A report by consultancy KPMG and FCM Travel Solutions estimates that India’s corporate travel market is poised to triple in size by 2030 from $30 Bn in 2015. Another study forecasts business travel spending in India to reach $45 Bn by 2019. In terms of size, India is currently the 10th largest business travel market in the world.
While there are players like Yatra-owned Air Travel Bureau (ATB), Goomo, American Express Travel, Expedia.com, Thomas Cook, MakeMyTrip, etc., that are present either as service providers or online aggregators, Tripeur holds a uniquely strong position in the space.
Functionality wise, the segment essentially consists of five parts: pre-trip and approval; booking engine; compliance; expense management analytics part.
When asked how Tripeur scores over competitors, Thiagarajan confidently answered, “If you look at the competitive landscape, there are players that specialise in maybe one or two of these areas. There are companies that focus on expense management, while there are some that offer booking engine and so on. If you look at enterprise solutions, there is nobody else that is offering an integrated, end-to-end solution that we are aware of.”
Given that the sector’s scope is enormous and only increasing with each passing day, Tripeur is certainly in a strong position to become a market leader. Add to that its first mover advantage and the company could chart a bright future as the pioneer of the third generation of business travel management technologies.