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Travel & Mobility Tech Newsletter

Dear Readers

There are an estimated 101,200 venture-capital backed startups in the world, of which 341 have a company valuation of at least $1 billion (so-called unicorns). That means 0.34% or 1 in 297 startups managed to reach unicorn status. Without a doubt, joining the ranks of billion-dollar companies is anything but easy.

But there is some good news for aspiring founders: due to unprecedented funding amounts flowing into startups these days, chances of your startup to become a billion-dollar company seem a little less tiny today than in the past. According to TechCrunch estimates, the unicorn probability five years ago was 0.07% or 1 in every 1,538 startups!

On a different note, many people in "tech startup land" are annoyed by all the unicorn hype, especially because of the culture of over-confident startups who define themselves by hitting some magical $1 billion valuation number and the financiers who back them irrespective of metrics that justify it.

Despite all this, we really need to talk about unicorns today. Because we made a very uncommon observation: the unicorn club in Travel & Mobility Tech is shrinking! For the first time in years, unicorns are becoming rarer again. We'll explain below. Enjoy.

Lennart Dobravsky
Director Trend & Market Intelligence

Startup Radar

THE Metasearch Engine for Vacation Rentals

In times of an almost infinite abundance of accommodation alternatives, travelers are looking for easy, convenient search and price-comparison options.

This is exactly where Berlin-based startup HomeToGo spotted an untapped opportunity.

By addressing the growing segment of alternative accommodations, the platform aggregates more than 15 million vacation rentals in 200 countries from around 600 providers, such as Airbnb and many others.

Our very own Managing Director Gleb Tritus took a closer look at HomeToGo's business model and the people behind the company. 
 Read the full analysis on Medium
Airline Radar

The Airline Digital Index (ADiX)

We continue to quantify digitalization amongst major Western airlines. For a look into past digital metrics, check out our previous editions: More to come every two weeks on this newsletter. Stay tuned. 

Let's jump right into today's metric. We asked: how easy is it to book a flight online? 
Metric #5: ONLINE BOOKING EASE

Definition: The number of clicks it takes to book a domestic flight online 

This metric required some hands-on research (literally). We clicked our way through the entire booking flow up to the payment stage for each of the 26 Western airlines in our ADiX sample to compare the number of clicks it takes to book a flight.

To ensure comparability, we completed this process for the booking of domestic flights only. International flights often have extra information requirements depending on destination. 

Below are the 10 airlines with the fewest clicks to book a domestic flight: 
Congratulations to Vueling for making it most convenient and seamless to book a flight online. 

This metric goes to the heart of the digital experience that airlines offer to their customers. Easy access, quick processes, and intuitive booking flows are all well-known elements of a successful User Interface (UI) or User Experience (UX). While our metric falls short of capturing all the very nuanced aspects in this field, the number of clicks to complete a booking can be considered a customer's "digital effort", which should be minimized in order to maximize the online booking experience. 
A legitimate question our airline experts among our newsletter readers might have right now: Why isn't Ryanair on this list?

It's no big secret that the LCC recently redesigned its online booking platform with the aim of making it as easy and enjoyable to use. 

In fact, we discovered that Ryanair has greatly reduced the number of screens to book a flight (which is another one of our metrics to be published in the future) by combining various input requirements in the same page. Subjectively, this does make it easier to browse. Nevertheless, booking a flight on Ryanair still requires a large number of clicks (41), which does not put it amongst the top 10 for this specific metric. 
Disclaimer: Airlines do change their booking flow every now and then. As a result, our numbers – which were gathered in Q1 2019 – might not reflect the booking flow as of today or in the future. We also only measured the booking flow for unidentified users. The ranking might be different in the case of booking as a registered user, which might make the process easier by saving previously entered information. 
Trend Radar

Crazy Weeks in Unicorn Land

Travel & Mobility Tech’s unicorn club – meaning the exclusive group of privately-held startups valued at more than $1 billion – is going through some major changes these days.

For the first time in years, the number of billion-dollar companies in the Travel & Mobility Tech context has significantly dropped and is expected to further shrink in the upcoming weeks. While we counted 41 unicorns in early March, the number stands at 38 today and is expected to drop to 36 shortly.

What happened?

Less than 2 weeks ago, Lyft – the ride-hail company from the U.S. and Uber's major domestic competitor – made its long-awaited step from private to public company in one of the most talked about tech IPOs since Alibaba went public in 2014. 

Based on yesterday’s share price, Lyft holds a current market cap of roughly $17 billion which is above Lyft’s last valuation in the private markets (see graphic below) but below Lyft’s $24 billion valuation on opening day of being publicly traded.

Why is this important?

Lyft is the first in a series of IPOs from highly-valued startups expected to enter the stock market in 2019 – many of them come from the Travel & Mobility Tech space, such as Uber, Airbnb, Oyo, and others.

The reaction of financial markets to Lyft's IPO (especially its EV/sales multiple) is considered an important indicator of how the other prospects will be priced when they enter Wall Street. Lyft's share price drop in recent days is a bad signal for all of them.

In fact, Uber is most likely paying the price of going second after it long battled with Lyft on who would IPO first. According to latest rumors, the firm is planning to seek a valuation between $90 billion and $100 billion short of the $120 billion investment bankers previously told the company it could be worth in an IPO.

What else is new?

  • Middle-East ride-hailing unicorn Careem left the unicorn gang as it got acquired by...Uber, for $3.1 billion. The acquisition of the Dubai-based firm will give Uber a stronger foothold in the Middle East/Northern Africa region. It will also help Uber move one step closer to its goal of having 1 billion users ahead of its rumored IPO. 
  • JetSmarter – often called the “Uber of private jets” also successfully exited the startup universe. The company got taken over by private jet company Vista Global. Vista, based in Dubai, is one of a number of private jet companies raising capital to buy out competitors and lead consolidation in the private jet industry. We previously looked at the lucrative business opportunity in the on-demand private business jet segment in one of our previous newsletter editions, see here.

And that’s still not all... 

More changes within the unicorn club are expected to happen over the next couple of weeks. Two examples: Chinese bike-sharing provider Ofo, as well as autonomous-vehicle manufacturer Faraday Future are both about to be officially announced bankrupt, which would immediately cancel their unicorn memberships.  

Bottom line: unicorn land creates but also destroys a lot of value these days.

Web Radar

The Entire Mobility Startup Landscape

If you have been reading our newsletter for a while, you probably know that we ambitiously track and monitor thousands of relevant startups that are somewhere located along today's increasingly fragmented traveler journey. 

In fact, we count more than 2,600 relevant startups in our space as of today (who collected a whopping $44 billion of venture capital in 2018 alone).

We (the Lufthansa Innovation Hub) coined this ecosystem “Travel & Mobility Tech” – hence the name of this newsletter.

In our understanding, Travel & Mobility Tech can be broken down into eight major components, each representing one crucial step of the traveler journey, see here:

All eight categories have their own unique value chains, thereby forming individual, multi-faceted startup ecosystems themselves.  

Take MOBILITY as an example: while our perspective on mobility concentrates on those startups providing actual mobility services – meaning transporting people from point A to point B, be it on the ground (e.g. via e-scooter, shared bike, autonomous car, etc.) or in the air (think of future air-taxis) – mobility as a whole is a lot more complex. 

There are suppliers providing mapping and navigation software to the Ubers of this world, battery manufacturers equipping electric cars, smart-city startups developing better parking solutions, and so on…

If you are interested to learn more about the entire mobility landscape in its full complexity, check out this very-well researched infographic and blog post from UVC Partners' Early-Stage VC Alex Kiltz.

Press Radar

Our Recommended Must Reads 

AIRASIA WANTS TO BE AN OTA  AirAsia, whose website is used by 65 million customers every month, is considering a plan to sell tickets of non-competing carriers on airasia.com, using its size to give online travel agents a run for their money. It plans to leverage the volume of data available from frequent travelers on its network.
 Read more in South China Morning Post
AMAZON SELLING AIRLINE TICKETS? – Amazon may soon start selling airline tickets and allow food orders, leveraging the user base to generate more transactions on its platform and become a super app in the manner of Tencent’s We-Chat. The web retailer is in the midst of beta testing flight bookings in collaboration with travel portal Cleartrip. 
 Read more in Economic Times
AIR-TAXIS IN SINGAPORE – Air taxis will soon be hovering over Singapore's skies as trials are set to get underway in 2019. The Civil Aviation Authority of Singapore (CAAS) revealed on Tuesday (Apr 9) that initial trials with German company Volocopter will take place in the southern part of Singapore.
 Read more in Skift
Funding Radar

Most Recent Venture Capital Deals

 = Exit Alert (Startup listed at stock exchange or acquired)
 = Unicorn Alert (post-deal company valuation at >$1B) 


Klook – a Hong Kong based travel tours and activities booking platform raised $225M in funding from SoftBank, Sequoia China, Matrix Partners, TCV, and OurCrowd in its ongoing Series D round. 

OYO Rooms  – the Indian operator of a branded network of hotels raised between $100M and $200M in funding from Airbnb as part of its ongoing Series E round. 

Movo – a Spanish operator of electric scooters raised $20M in funding from Seaya Ventures and Mutua Madrilena. 

V Ressorts  – an Indian operator of a chain of boutique resorts raised $10M in funding from HNIs, Bedrock Ventures, and RB Capital. 

Chalo.com – an Indian provider of a transport information and ticket booking platform has sold a 10% stake to Shunwei Capital for $7.19M. 

Fyle – an Indian online expense management platform raised $4.2M in funding from Tiger Global Management, Pravega Ventures, Beenext, and Freshworks. 

Miles – an American rewards application for all forms of travel and commute raised $2.25M in funding from JetBlue Technology Ventures, Porsche Digital, Sony Innovation Fund, and SAIC. 

Twistr – a French peer-to-peer flight search engine raised $1.8M in funding from undisclosed investors. 

Ferryhopper – a Greek developer of  an online platform created for ferry ticket bookings raised $600K in funding from Metavallon VC and the easyGroup. 

Blockskye – an American developer of an inventory and booking management platform raised an undisclosed amount in funding from the Airlines Reporting Corporation and other undisclosed investors. 

 JetSmarter – an American provider of private air travel services was acquired by private jet company VistaJet for an undisclosed amount. 

 BnbLord – a France based provider of property management services was acquired by short-term rent management company GuestReady for an undisclosed amount. 

 TravelWise Group– a UK based provider of travel management services was acquired by Travel Planet for an undisclosed amount. 

 

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