The following 5 travel startup concepts have come from being relatively low-profile startups to FinTechs that have survived a heavily saturated sector. A lot of travel startups launched during the past few years no longer exist due to a lack of funding or due to lack of user engagement.
Overview: Affirm
Acquisitions: 2 Acquisitions
Total Equity Funding:
$
420M in 3 Rounds from 6 Investors
Headquarters: San Francisco, CA
Description: Affirm allows users to make purchases for travel/products and pay off for the purchases in easy, fixed monthly payments
Founders: Nathan Gettings, Jeffrey Kaditz, Max Levchin
Website:
https://affirm.com
Overview: Airfordable
Total Equity Funding:
$
120k in 1 Round from 2 Investors
Most Recent Funding:
$
120k Seed on August 23, 2016
Headquarters: Chicago, Illinois
Description: Airfordable allows users to buy flights for a deposit upfront and pay off the rest
in an easy, flexible payment plan before departure
Website:
http://www.airfordable.com/
Overview: Uplift
Total Equity Funding:
$
8.2M in 1 Round from 4 Investors
Most Recent Funding:
$
8.2M Series A on November 10, 2014
Headquarters: Sunnyvale, CA
Description: UpLift allows users to book travel now and spread their travels into affordable,
low-interest payments
Founders: Stu Kelly, Brian Barth
Website:
http://www.uplift.com
Overview: Flyr
Total Equity Funding:
$
15.34M in 5 Rounds from 24 Investors
Most Recent Funding:
$
8M Series A on January 18, 2017
Headquarters: San Francisco, California
Description: FLYR predicts and manages price volatility of travel products, enabling a broad range of solutions for travelers
Founders: Cyril Guiraud, Alexander Mans, Jean Tripier
Website:
http://flyrlabs.com
Overview: FomoTravel
Total Equity Funding: Undisclosed Amount in 1 Round from 1 Investor
Most Recent Funding: Seed on March 2, 2017 / Undisclosed Amount
Headquarters: Cape Town, NA – South Africa
Description: FomoTravel is a unique social savings platform that allows keen travelers to pay for future travel experiences.
Founders: Andrew Katzwinkel
Website:
http://fomo.travel
The above 5 travel startup concepts can be successful in any economy because they allow users to make payment ‘before’ they take the flight and not continue to make payments after the trip has ended. The reason is simple: If the user doesn’t pay the installments as scheduled they won’t be able to take the flight which leads to fewer cases of people walking away from their debt.
Core Features
⊕ Core Features:
Airfordable
Affirm
Uplift
Flyr
FomoTravel
• Country
US
US
US
US
South Africa
• Installment Payment
YES
YES
YES
YES
YES
• Credit Check
NO
YES
YES
NO
NO
• Interest
NO
10% -30% APR
4.99% (9.01% APR)
NO
NO
• Booking Fees
A one-time fee on the price of the ticket that varies between 10% and 20%.
NO
2% origination fee
NO Fees
NO
• Price Protection
YES
NO
NO
YES
YES
• Cancellation fee
NO
NO
NO – but airline might charge a fee
Changes to packages with less than 45 days to departure date a 100% cancelation fee will be charged
• Banking partner
–
Cross River Bank
Kansas-chartered bank
–
Standard Bank
• Late payment Fee
NO
NO
$15.00 late fee along with reporting negative loan activity to the credit reporting agencies.
NO
A non-payment penalty of 5% on monthly payments that are missed due to reverted bank charges
Usability
⊕ Usability:
Airfordable
Affirm
Uplift
Flyr
FomoTravel
• Booking Flight
Upload a screenshot of your flight details
Through a travel partner
Through a travel partner
Through a travel partner
Choose from inclusive package deal
• Making Payments
Secure your ticket with a deposit, and pay the rest in installments before your departure date.
Pay over three, six or 12 months using a bank transfer, check, or debit card
Pay a deposit of typically $200 or $300 and delay paying the rest until 45 days prior to departure
Secure your ticket with a deposit, and pay the rest in installments before your departure date.
Secure your ticket with a deposit, and pay the rest in installments before your departure date.
• Flight Tickets
Receive your e-ticket after your last payment
Receive your e-ticket after your last payment
Receive your e-ticket after your last payment
Receive your e-ticket after your last payment
Receive your e-ticket after your last payment
Added Value
⊕ Added Value:
Airfordable
Affirm
Uplift
Flyr
FomoTravel
• Cashback
$100 for first trip over $1500
NO
NO
NO
NO
• Co-Branding
not available
NO
NO
NO
NO
• Friend Referral
$25
NO
NO
NO
NO
• „Social savings lay-by model“
NO
NO
NO
NO
YES – Invite friends and family to contribute to those payments or if you shares your trip on social media, the payment process changes.
Flight
⊕ Flight:
Airfordable
Affirm
Uplift
Flyr
FomoTravel
• Travel Partners
Expedia
Google Flight
Justfly
Orbitz
Priceline
Travelocity
Vayama
Any airline website except Spirit.com
Expedia
More than 200 travel suppliers
Jetblue
Tripadvisor
Priceline.com
AXA
Worldsurfaris.com
Puretours
Singer Group
XL Embassy Travel
Amazingholidays.co.za
bellaire travel
Holidayfactory.co.za
clubmed
Beachcombers Tour
G Adventures
• Bookable Flights
Departures MUST originate from the US. Multi-leg and round trips are accepted. One ways are not allowed
ALL – Departures MUST originate from the US
ALL – Departures MUST originate from the US
ALL – Departures MUST originate from the US
Package – Departures must originate from SA
• Number of travelers on one booking/payment plan
10
Unspecified
Unspecified
Unspecified
Unspecified
• Use frequent flyer number
YES
Unspecified
Unspecified
Unspecified
Unspecified
• Flight changes before plan completion?
Yes – with a fee ranging from 200-500$
NO
NO
NO
NO
• Flight changes after plan completion?
NO. Only through airline
NO – Only through travel partner
NO – Only through travel partner
NO – Only through travel partner
NO – Only through travel partner
• Unaccompanied minors?
NO
NO
NO
NO
NO
The travel startup concepts have a few drawbacks
How do they secure an airline ticket for 3 months or do they purchased it right away and just withhold your ticket information (information which a user could always get by just calling the airline directly)?
Some airlines do require credit card verification at check-in. In the case of the 5 travel startup concepts, the booking might be an issue if it is made through the airline’s website and not an Online Travel Agent (OTA) or a brick and mortar agency.
Additionally, if the verification process is declined and the notification might take up to 24 hours. Should the travel startup concepts decline the financing or the fare disappears the user is stranded. Considering that the down payment is due immediately, the user will also have to wait for the processing of the refund. This presents an undesirable situation for the very user group these travel startup concepts cater to.
We will contact these 5 travel startup concepts to shed some light on credit transparency as a liability. Our question: What is the repayment rate considering that micro loan sites repayment rates are around 98-99%?
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About
Kevin Moseri
A marketing expert for the first-to-be-licensed E-Money institute in Germany, PayCenter GmbH. He has experience in developing online marketing campaigns, online & mobile product launches, and EU funding regulation. He is an active fintech blogger with interests in online banking, mobile banking, mobile payment, and insurance.
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“The following 5 travel startup concepts have come from being relatively low-profile startups to FinTechs that have survived a heavily saturated sector.”KEVIN MOSERI