Hopper has made its third acquisition in less than a year as the travel tech company develops new product lines and moves into new travel verticals.
Hopper purchased Parisian startup Smooss in a bid to add more airline partners to its B2B offering. The financial terms of the deal were not disclosed.
“The velocity of the cloud offering is kind of stupefying.”
– Frederic Lalonde, Hopper
Smooss operates as a backend for airlines to sell tickets, in addition to travel plan disruption tools and COVID-19 health check verification. The company also provides airlines with a tailored reservation system to steer pricing and push out offers to customers from their own websites rather than working through travel agencies or other digital booking platforms.
The Parisian startup seems a logical addition for Hopper, which last year launched Hopper Cloud, a B2B product that allows travel providers to integrate and distribute Hopper’s FinTech and agency content. The B2B offering includes a white-label travel portal for companies.
Smooss will be integrated with Hopper Cloud, allowing Hopper to serve its existing customers, including the airlines of the Air France-KLM Group and Corsair. The entire eight-person Smooss team, including CEO and co-founder Benjamin Lalanne, will join the Hopper Cloud team.
“What the Smooss team has that we don’t have is they have a deep understanding of the passenger service system,” said Frederic Lalonde, CEO and co-founder of Hopper, in an interview with BetaKit.
“[Smooss has] created all these value-added services,” he said. “So when you think about what we’re trying to do with the [Hopper] Cloud – price freeze is the example that comes to mind, which is to enable airlines to offer price freeze on their own channel – this is a perfect fit because they actually understand the system that the airline is running and we view this as a way to accelerate our offering directly to airlines.”
Lalonde argues that FinTech products like Hopper’s price freeze or flight disruption guarantee are needed in the current environment where airlines are focused on recovery from the pandemic. The CEO stated that such products “have the ability to drive conversion and create new revenue streams.”
RELATED: Hopper’s Series G kept Montréal funding strong in Q3
The purchase of Smooss follows Hopper securing a $5 billion (all numbers USD) valuation after a $35 million secondary deal that allowed Hopper employees and some shareholders to sell part of their holdings in the company.
The secondary deal came shortly after Hopper entered a new travel vertical – home rentals – putting the Montréal startup in direct competition with the likes of Airbnb and Vrbo.
Following an initial hit from COVID-19, Hopper has been on a mission to grow its product offerings beyond flight and travel bookings. These days, the company makes most of its revenue from its FinTech products, which are the crux of its B2B offering.
Hopper’s B2B offering has attracted the likes of Capital One, Amadeus, Kayak, Trip.com, and MakeMyTrip. It also became the muscle behind Marriott Bonvoy Tours after Hopper bought Boston-based B2B tour and activity booking solution PlacePass in the fall. PlacePass marked Hopper’s entry into the travel experience business and brought along with it the Marriott International partnership.
Hopper claims “there are many more [potential B2B customers] in the pipeline.”
Hopper has used acquisitions to both move into new verticals and even create its B2B offering. Its home rentals product, for example, was the result of Hopper’s purchase of travel startup Journy in May of last year. This past year, the team from Pilota was also acquired and tasked with developing a new FinTech vertical.
As Hopper has branched out into new products and verticals, the company claims to have seen year-over-year revenue growth of over 300 percent last year.
Hopper, which secured $175 million last year, is actively looking to purchase more companies – with a focus on travel, data science, and engineering expertise.
Speaking with BetaKit last year, Lalonde noted plans to introduce more travel products to its repertoire – the short-term home rental business being just the first example of that. However, now that Hopper has a home rental and a travel experience offering, Lalonde says the company is not actively working to add new products at this time.
RELATED: Hopper acquires PlacePass, scores Marriott Bonvoy as customer for B2B business
Rather the CEO wants to focus on the potential for Hopper’s B2B product. Whereas Hopper has many competitors on the consumer side – from Airbnb to Expedia, to almost any travel booking agency – Lalonde feels Hopper has a first-mover advantage with the B2B play.
“This is a business that did not exist in September of last year, it wasn’t launched,” he said. “So the velocity of the cloud offering is kind of stupefying.”
“What I find the most interesting is the velocity at which the B2B business is growing,” Lalonde added, pointing to deals that are signed or live in Latin America, North America, Europe, India, and China.
With the rapid growth, Lalonde sees the potential to take his company public. However, speaking to BetaKit, he noted that while that is something Hopper is considering, his criteria to do so is twofold: $1 billion revenue (something he said the company is getting close to); and seeing how the B2B offering pans out.
“It doesn’t make sense to go to public investors with half your revenue in the future if you don’t understand how the business works,” Lalonde said. “So in a way, the success of Cloud makes me more patient because I really want to understand what we’re doing there … [we] need to ensure that business is a fit before we [go public].”
Feature image courtesy of Hopper.
