This week Surf Air, the company looking to be the Netflix for first-class air travel, is officially announcing the successful close of its Series A funding. While the company isn’t revealing the specific amount, founder and CEO Wade Eyerly did tell BetaKit that it’s somewhere between the $2 million he was originally reported as seeking and the $14 million PandoDaily recently reported as the final total raised, based on information from anonymous investor sources.
Eyerly’s startup will be using this injection of funds, raised from NEA and Anthem Venture Partners, as well as a number of prominent angels and individual investors including actor Jared Leto, to get Surf Air literally off the ground and run a “demonstration route,” covering the L.A. area, out to Palo Alto, Santa Barbara and Monterey, set to launch at the end of this summer.
“We’re going to fly this for 90 days to learn what member behavior is,” Eyerly said. “We eliminate your per flight cost, and we take away the pain points of travel. So when you add up all the pain points and you strip them out of flying, what does that do for a member’s demands for travel? We have our best estimates and our assumptions, and now we’re going to go test it.” After gathering feedback and surveying member reactions, Eyerly says, the company will adjust and run the new program again for another 90 days to see if its changes work well. The process will be a true beta test, one designed to make the final shipping product the best it can be, and that’s what this round of funding has made possible for the fledgling startup.
Surf Air’s model, which we covered before when they emerged from stealth as a pre-launch company, will allow members to “subscribe” to air travel, giving them pretty much unlimited flights during a given month, with certain limits. Eyerly points out that members will sign up for a three-month term initially, with renewals on a single month basis after that. This should help Surf Air avoid the kind of poor planning with regards to pricing that got American Airlines into so much financial trouble with its lifetime passes. The company will also be looking at that during its initial trial runs and beyond, to see exactly what kind of contract terms make sense, and whether different pricing options will appeal to different types of travelers.
Eyerly’s approach is decidedly cautious, but starting up an airline is a much different beast compared to building a website or app. Still, his initial pool of users is already pretty impressive. The company has 1,300 people on its wait list, and will be allowing in 500 people for its initial pool once it receives final approvals from the FAA, an essential step for getting flights in the air as a commercial airline.
Surf Air’s origins are unusual for its type of business; the company originally was conceived of as a commuter service for east coast flyers, but then Eyerly moved the team west and got into Mucker Labs, a Los Angeles tech-startup early stage incubator. That changed the way Eyerly thought about the business, and helped sharpen its focus.
“We see ourselves as much more of a technology company now than we did initially,” he said. “Fundamentally, we’re still an airline – we have planes, we move people from A to B. But part of making that experience seamless and smooth is the technology portion. We showed up at a tech incubator without any tech talent on the team, and then quickly realized that was a big hole, and got very lucky with some talent [coming on board].”
Surf Air has some strong precedents that show it could be a hit, so long as the economics work out: JetBlue has had success selling out its Unlimited pass when it first launched, and garnered a lot of media attention. Eyerly said that JetBlue founder David Neeleman has actually proven helpful in providing advice to Surf Air about its model, and that in general he’s found others in the space willing to extend a hand as Surf Air tries to take to the skies. Whether or not Surf Air can make a go of offering subscription flying as its one and only business model remains to be seen, but the funding will at least help it find out.
