SoftBank-backed travel tech firm TravelPerk acquires U.S. rival and bags $135 million for expansion

Posted by Admin June 18, 2024 Travel

SoftBank-backed travel tech firm TravelPerk acquires U.S. rival and bags 5 million for expansion

LONDON — TravelPerk, a European corporate travel booking platform, told CNBC on Tuesday it has acquired Chicago-based startup AmTrav to help further its expansion in the U.S.

AmTrav, which operates in the same space as TravelPerk, will continue to operate under the same brand and its entire team will continue with the business.

To help fund the deal and TravelPerk’s broader expansion efforts, the company also raised $135 million in debt financing from private equity firms Blackstone and Blue Owl.

Avi Meir, TravelPerk’s CEO and co-founder, told CNBC the deal would allow the company to turbocharge its growth in the United States. He expects the deal to double TravelPerk’s U.S. revenues and make the country its biggest revenue-generating region by 2026.

“Currently, the U.K. is our biggest market,” Meir said in an interview with CNBC, pointing to the firm’s 2021 purchase of British corporate travel startup of Click Travel as the catalyst for its growth in Britain.

Going forward, Meir said, TravelPerk’s takeover of AmTrav will help support a “deep localization strategy” in the U.S., and enable it to offer customers “better rates and inventory options through deeper relationships with suppliers.”

AmTrav has long had data exchange arrangements in place with airline giants American Airlines and Southwest, he added.

TravelPerk now has over 200 employees based in the U.S. and plans to grow its headcount there by a further 35% by the end of 2024. The company employs more than 1,200 people globally. Last year, the firm saw its U.S. revenues grow 65% year-over-year.

The Global Business Travel Association estimated that the US corporate travel sector was worth $329 billion in 2023.

TravelPerk said its U.S. office footprint would expand to include AmTrav’s offices in Boston, Chicago, Los Angeles and Miami. The financial terms of the transaction were not disclosed by TravelPerk.

2 years of M&A talks

Jeff Klee, CEO of AmTrav, told CNBC that the company had been in talks with TravelPerk since 2021, adding he was reluctant to sell the firm he founded without the assurance that his firm’s operations would continue unimpacted by the takeover.

“The bar for me to do a deal was pretty high,” Klee told CNBC in an interview. “One of things that both companies have in common is we’re both at our heart software companies — but we both recognize that in the travel industry, there’s still a huge service component from travel.”

“Travellers want to do everything themselves until they don’t — when you get to airport, if there’s a hurricane [or other disruptions], you want someone to get you out of that mess … [so] the service point is very important.”

All AmTrav’s employees will stay on at the company, remaining in their current teams reporting to their same line managers, Klee said.

He joked the only difference would be that he and his co-founder, Craig Fichtelberg, would have a boss for the first time in 35 years: TravelPerk’s CEO.

With the extra $135 million in financing from Blackstone and Blue Owl, the firm’s total funding raised in 2024 now stands at $240 million.

TravelPerk raised $104 million from investors including SoftBank Vision Fund 2, Blackstone and Blue Owl in January 2024.

“We are pleased to provide capital that will enable TravelPerk to further execute on the company’s global growth strategy,” Kurt Tenenbaum, managing director at Blue Owl Capital, told CNBC.

“Avi and the rest of the management team have demonstrated a track-record of success, and we are excited to see what they can accomplish over the long-term.”

AmTrav was founded in 1989 by co-founders Klee and Fitchtelberg. The pair met as dorm-mates at the University of Michigan. AmTrav offers localized, digital travel management for small to mid-sized firms.

AI’s impact on corporate travel

TravelPerk said that its business and AmTrav would seek to capitalize on proprietary technology and develop new artificial intelligence capabilities.

Meir said he sees AI driving more in-person interactions, pointing to research from the company which found 38% of CEOs think AI will increase the need for in-person meetings facilitated by business travel.

The findings were based on a survey of business travel decision makers, travellers, and managers,

“For TravelPerk, AI is about making humans more efficient, rather than replacing them,” Meir told CNBC. “I believe in human connection. This is why we exist as a company.”

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“We’ve always focused on a human-first approach to implementing AI at TravelPerk, automating back-end tasks so our people have more time to interact with colleagues, customers and partners.”

TravelPerk’s customers include the likes of Betterment, Adyen, Wise and Red Bull. AmTrav counts more than 1,000 businesses as customers.

TravelPerk’s platform allows users to book business flights, hotels, trains and cars across the US, Canada, the UK Germany, France, the Netherlands, Spain, Italy, Portugal, India, Singapore, Mexico, Dubai and Israel.

Existing investors in TravelPerk include SoftBank, General Catalyst, Kinnevik, Greyhound Capital, Felix Capital, Target Global, LocalGlobe, Spark Capital and Heartcore.