Travel & Mobility Tech Newsletter

Dear Readers

Digital Transformation is arguably the greatest threat to well-established companies in a variety of industries. The airline sector is no exception.

We wanted to know: which airlines are best preparing themselves for a digital future?

Driven by our mission to provide unconventional, data-driven market research that you won't find anywhere else, we developed the first-ever purely data-driven Airline Digital Index (ADiX) that benchmarks the digital performance and maturity of currently more than 25 of the leading airlines in Europe and North America.

Over the next few weeks and months, we will continuously share results from our ADiX in bits and pieces exclusively via this newsletter. We jump right into it today by highlighting the first metric (out of +25 to follow).

Final ADiX scores are expected to be published later this year. Until then, stay tuned for updates and share this newsletter with all your airline friends and colleagues. Enjoy.

Lennart Dobravsky
Trend & Market Research Analyst

Startup Radar

Hopper: Predicting Airfares With AI 

When should you book your flights?

This is an old question every traveler has struggled with before. Canadian startup Hopper is addressing this industry secret with a fact-based approach. By analyzing trillions of historical flight prices, Hopper predicts the best time to buy your next flight.

Travelers love it. The mobile app has been downloaded more than 30 million times. 

We took a closer look at the company's approach and business model explaining why we convinced our parent company to engage in a strategic research alliance with this promising travel-tech startup.
 Read more on Medium
Airline Radar

The First-Ever Airline Digital Index (ADiX)

As part of our constant efforts to impulse innovation and digital success in the Travel & Mobility Tech space, we have invested considerable time and effort in finding ways to quantify the digital maturity of airlines – a complex task due to the variety of layers which digitalization acts on.

The result of our work: the Airline Digital Index (ADiX) which benchmarks the most prominent airlines in Europe and America based on their digital capabilities. 100% data-driven.

The metrics that feed into the ADiX look at the various aspects of an organization's digital capabilities: from employees' skill sets to overall digital strategy and delivery as well as the quality of digital channels and products (e.g. website and mobile app performance). 

Today, we are going to share the first metric and the accompanying results with you.
Metric #1: Recruitment of Digital Talent

Definition: Share of open vacancies with digital-related job titles

This covers all pure tech roles as well as jobs relating to digital projects such as e-commerce, mobile, agile, UI/UX, data science, analytics, and more.

We analyzed thousands of current job postings by +25 airlines in our sample. The 10 leading airlines based on "Recruitment of Digital Talent" are:
So what to take away from this ranking? 

There are two possible interpretations:

#1: Airlines that recruit more digital talent are understood to be less digital, yet willing to move in that direction and thereby eager to build their respective capabilities. They do not have enough digital talent as of today but are aiming to hire accordingly. 

#2: Airlines that recruit more digital talent are regarded as more digital. The reasoning being that leading digital airlines are able to better empower tech talent, leveraging more value from it as they have more digital projects running for which they need staff. 

We believe interpretation #2 to be the case, partly for the reasons outlined above and most importantly because the airline industry is without a doubt lagging behind many other industries in terms of digital maturity (just think of retail or financial services). In fact, major digital progress in the airline sector is just getting started (as stable wifi on board is still a rarity as we all know).

There is simply no way, that any airline in 2019 is so digitally mature, that they wouldn't need any more digital/tech talent. Actually, we will never overcome such a digital inflection point after which digital skill sets will not be needed anymore. The more digital talent is hired, the better as every step of the travel journey will soon be digitally infused.

So congrats to Alaska, JetBlue and United – the winners of round #1.

A final thought: an average share of over 20% of job postings targeting tech roles by the leading 10 airlines is an impressive statement, especially for an industry like ours whose workforce is largely made up of operational roles (think of pilots, cabin crew, ground staff) as they are the ones responsible for fulfilling the core task of what every airline does: flying travelers from A to B.

This high share of digital jobs is a strong indicator that many airlines have realized the importance of technology in addressing today's customers – via digital touch points along the travel journey – and in making smarter decisions across a variety of internal functions (e.g. pricing, network planning, MRO).
Disclaimer: The "Recruitment of Digital Talent" metric should be understood as a proxy for digital recruiting. We are aware of the metric's shortcomings, for instance, high number of job vacancies could also mean that companies struggle to retain their existing talent. Furthermore, much tech recruiting happens behind closed doors through professional recruiters and some organizations also choose to outsource a lot of their technology and digital projects.

Nevertheless, we are convinced that our metric provides an interesting indication of the degree to which airlines are recruiting in-house digital talent and, by consequence, of the degree to which they are embracing digitalization. 
Trend Radar

Let's Look Into The Crystal Ball

It's time for some bold predictions.

No worries, we won't jump on the bandwagon of so many others in the VC space who have recently shared their lengthy concerns about the growing stock market volatility and how this is expected to discourage the boiling hot venture capital space. Remember: with almost $44 billion, more money was invested in startups from the Travel & Mobility Tech ecosystem in 2018 than ever before.

While we acknowledge that last year's whopping VC funding figures will be hard to beat this year, we remain bullish that innovation dynamics in Travel & Mobility Tech will remain exceptionally high – whether 30, 40 or 50 billion dollars will be deployed to startups in our space. In any case, it's going to be lots of $$$ again.

We sat down with our internal VC experts and came up with the following three predictions for 2019. We will get some of them right, and some wrong. Let's see.

#1 We expect a significant shift away from individual transportation apps toward bundled mobility offerings

Users' smartphones (especially of those within major cities) are flooded with way too many mobility apps. Fortunately, more and more startups are either building provider-agnostic solutions or helping existing mobility (and travel) services to better connect with each other through a much needed underlying tech backbone (check out YILU).

#2 Berlin will become Europe's leading startup hub in Travel & Mobility Tech

Yes, we might be having a slight bias for our hometown here. But with eight significant funding rounds of highly promising Berlin-based Travel & Mobility Tech startups at the end of last year, plus Travel & Mobility Tech's next unicorn potentially coming from Germany's capital, we are optimistic that Berlin will take over London and Paris in terms of venture capital investments within Travel & Mobility Tech in 2019.

#3 At least five new startups will join the Travel & Mobility Tech unicorn club

Currently, the Travel & Mobility Tech unicorn club consists of 37 companies (three more since our last update). More startups are about to join. We will share our best bets in our next newsletter edition. Don't miss it.

Press Radar

Our Recommended Must Reads 

AIRBNB IN THE AIR? – The $31 billion company has taken the step of hiring longtime aviation industry veteran Fred Reid to be its first-ever global head of transportation. Apparently not interested in opening a new airline, the transportation aspirations of Airbnb will target improving the current travel experience of customers through partnerships.
 Read more in Future Travel Experience
JAPAN AIRLINES TARGETS STARTUPS – Japan Airlines has set up a $70m corporate venture capital (CVC) fund to invest in travel and mobility startups. The fund will be managed by US VC firm TransLink Capital. JAL said this will enhance its product offerings as a full-service carrier and leverage its assets to focus on new types of transportation.
 Read more in Deal street Asia
TRAVEL BOOKING ON INSTAGRAM – HotelTonight, Icelandair, Traveling to Portugal, and NYC and Co. were among the travel brands and destinations offering Instagram Stories for travel booking. Via the hint “Swipe up to customize your search”, the Instagram story would forward users to the respective online travel platform. 
 Read more in Skift
Funding Radar

Most Recent Venture Capital Deals

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

Lime – the American developer of a scooter and bike-sharing platform raised $310M in funding from Alphabet, GGV Capital, Fifth Wall Ventures, Bain Capital Ventures, Andreessen Horowitz, and further investors. 

Grab – the Singaporean ride-hailing platform raised $200M in funding from Thailand-based retail conglomerate Central Group. 

 Grin / Yellow – Latin America’s leading bike and scooter sharing companies have merged to form Grow Mobility Inc., raising $150M in additional funding from undisclosed investors. 

Cluno – a Munich-based provider of an online car subscription platform raised $28M in funding from Valar Ventures, Atlantic Labs, and Action Capital Partners. 

Virtuo – a Paris-based provider of a car rental platform raised $23M in funding from Iris Capital, Balderton Capital and Raise Ventures.

Ola – the Bengaluru-based developer of a ride-hailing mobile application raised $16M in additional funding in its ongoing Series J round from J3T Ventures, Lyon Assets, and further private investors. 

May Mobility – a Michigan-based developer of autonomous vehicle technology for shuttles raised $22M in funding from Millennium New Horizons, Cyrus Capital Partners, BMW i Ventures, Toyota AI Ventures, and further investors.

Zingle – an American developer of a communication software for hospitality raised $11M in funding from PeakSpan Capital, Bonfire Ventures, and further undisclosed investors. 

2nd Address – a San Francisco-based developer of an online house rental platform raised $10M in funding from GV, Foundation Capital, Amicus Capital, and further undisclosed investors. 

Zeelo – a London-based provider of a personalized shared mobility service raised $5.53M in funding from ETF Partners, InMotion Ventures, and further private investors. 

Festicket – a London-based developer of an online booking platform raised $4.6M in funding from InMotion Ventures, Edge Investments, Lepe Partners, and further investors. 

LuggageHero – a Copenhagen-based provider of luggage storage services raised $1.45M in funding from Nordic Eye Venture Capital, Innovationsfonden, and Vaekstfonden. 

 Packdat – a Singaporean travel planning startup has been acquired by Indonesian internet provider Passpod for an undisclosed amount. 

 Travel Tripper – a New York-based developer of an online travel booking platform is merging with reservation platform provider Pegasus Solutions for an undisclosed amount. 

 Empathy Marketing – a Dublin-based operator of online travel marketing platforms Pigsback, TheDiningRoom and LuxuryBreaks has been acquired by the provider of the travel deal platform Secret Escapes for an undisclosed amount.

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