Hopper acquires PlacePass, scores Marriott Bonvoy as customer for B2B business

Montréal’s Hopper is known for its flight and travel booking app, but the company makes most of its revenue from its FinTech products, which it has turned into a B2B offering for travel company partners.

Hopper is expanding that B2B program with its latest acquisition: Boston-based PlacePass, which comes along with new products and a partnership with Marriott International’s Marriott Bonvoy Tours.

Hopper has not disclosed the financial terms of the deal, but PlacePass’ around 12-person team will join the Montréal-based startup, along with its B2B tour and activity booking solution. The acquisition marks Hopper’s first entry into the experience business.

“Hopper Cloud was particularly compelling to our investors, as it means that they will be able to access a much larger set of capabilities.”

Founded in 2015, PlacePass developed tech that enables hotels, airlines, and vacation rental companies to offer destination experiences. In 2017, PlacePass penned a deal to power Marriott International’s Marriott Bonvoy Tours and Activities platform, offering 300,000 experiences in over 800 global destinations.

With its purchase of PlacePass, Hopper’s B2B offering (launched earlier this year) will become the muscle behind Marriott’s activities platform.

According to Hopper CEO and co-founder ​​Frederic Lalonde, the shift from consumer-focused business to B2B is all part of Hopper’s ambitious plans.

The company’s B2B product, Hopper Cloud, allows travel providers to integrate and distribute Hopper’s FinTech and travel agency content. When Hopper secured $170 million USD in a Series F round earlier this year it also announced a deal with Capital One to use Hopper Cloud to power a travel booking app for Capital One customers.

The offering also attracted major travel company Amadeus, which added Hopper’s FinTech offerings to its product line and is sharing its car rental inventory in return. Amadeus opens up a sizeable channel for Hopper as the former serves 1.5 billion people a year in over 190 countries.

The signing of a major travel company like Marriott (through the purchase of PlacePass) is sure to increase the attractiveness of Hopper’s B2B offering as well.

Hopper’s FinTech products include insurance that allows travellers to cancel a flight for any reason up to 24 hours before departure and get back most of the ticket price. The second product is price freeze, which allows travellers to hold a price for up to two weeks before booking.

The startup is also looking to add instant refunds to that list, something Lalonde told BetaKit became increasingly more important amid the pandemic as Hopper faced a slew of negative reviews from customers regarding booking cancellations and refunds while COVID-19 fueled turmoil in the travel industry. For a time, Hopper even chose to shut down its phone line.

The issues turned into an abundance of negative customer reviews that landed Hopper with an F rating from the Better Business Bureau (BBB).

But the company says it has learned hard lessons from COVID-19. It invested in automation, while its customer service team has become the largest at the company with close to 1,000 support agents, currently.

Hopper co-founders (from left) Frederic Lalonde and Joost Ouwerkerk. Source Hopper

With the changes the company made and travel slowly rebounding, Lalonde told BetaKit that Hopper is seeing fewer negative reviews. While less than positive reviews can still be found on Hopper’s social media channels and the BBB website, Lalonde is not deterred. Nor will Hopper move away from its roots, despite the shift into B2B and FinTech. Beyond flights, Hopper offers hotel and car rentals, which Lalonde says ​​make up half of the company’s transactions.

Hopper also plans to introduce more travel products to its repertoire, including a short-term home rental business that would put it up against the likes of Airbnb.

“Our thesis is that, over time, and this is also a generational thing, people will contract all of their commerce, or nearly all of it, through mobile,” said Lalonde. “They will not start with a Google search. They will launch an app and we want to be the starting point for all leisure and travel … around the world.”

Hopper’s ambitious plans and acquisitive strategy, which also sees the company making continuous acqui-hires (most recently the team from Pilota, which is tasked with developing a new FinTech vertical), is backed by a sizeable reserve of cash.

This year alone, Hopper has raised $345 million USD, with total funding over its lifetime sitting at ​​$583 million. The latest capital was a $175 million Series G round that came less than six months after Hopper’s Series F financing, which the company told BetaKit brought its valuation to $3.5 billion.

Hopper’s backers include Goldman Sachs Growth, GPI Capital, Inovia Capital, WestCap Group, and Citi Ventures, among others.

RELATED: Montréal sets new funding record with two massive travel tech deals in Q2 2020

With its notable investors and sizeable runway, Hopper has garnered the interest of consumers and travel businesses, alike. The company’s app is nearing 70 million downloads, according to Lalonde. The CEO claimed Hopper app downloads account for 30 percent of all travel downloads in North America, ahead of Booking.com for new downloads. Lalonde also claimed Hopper represents about five percent of all third-party air sale in the United States.

“All of that growth comes because we actually aggregate the selection and then we find better prices because we are app only,” said the CEO. “Those [travel] suppliers have all sorts of restrictions on what they’ll put available on Google and on search; they’re worried about price parity, and you get all these better deals on mobile.”

Hopper currently has its strongest presence in North America but Lalonde says the company is also seeing international travel come back and, as such, plans to grow its presence in Latin America and Europe. Hopper is also working to get licensed in Asia to allow it to start growing a presence there.

The company employs nearly 1,500 people, with 1,000 of those in customer service.

The PlacePass team will join Hopper to spearhead its experiences offering, an integration of the US startup’s product.

“Joining Hopper also lets us reach a much larger audience not only through the millions of travelers already using the Hopper app but also through Hopper Cloud, which powers travel and fintech offerings for travel brands across the world,” said PlacePass co-founder and CEO Ethan Hawkes.

PlacePass was backed by $14 million USD from a group of investors that included Fortune 500 companies in the hotel, car rental, and vacation ownership sectors, including Marriott International.

“The strength and momentum of Hopper Cloud was particularly compelling to our investors, as it means that they will be able to access a much larger set of capabilities than we were able to provide as a standalone entity,” said Hawkes.

Feature image courtesy Hopper

Meagan Simpson

Meagan Simpson

Meagan is the Associate Editor for BetaKit. A tech writer that is super proud to showcase the Canadian tech scene. Background in almost every type of journalism from sports to politics. Podcast and Harry Potter nerd, photographer and crazy cat lady.