Vancouver-based travel-tech startup Launchtrip has raised a $4.7 million CAD seed round of funding, as the travel sector is hoped by many to bounce back following the COVID-19 pandemic.
“Group travel has always been on the periphery of the travel industry, so an innovative company is needed to solve this complex problem.”
The round was led by Axis Capital, with the remainder coming from investors described as “friends and family.” This investment represents Launchtrip’s first funding round. The proceeds will be put toward marketing, product development, and adding 30 people to Launchtrip’s currently 20-person team.
Launchtrip, led by founder and CEO Julian Ing, has designed a platform that aims to improve the group travel experience.
The software allows users to complete the entire process of booking a trip, including accommodations, restaurant booking, transportation booking, and splitting costs upfront from one app.
The travel booking market is heavily saturated with players such as Expedia, Booking.com, and Airbnb. Launchtrip differentiates itself with a focus on group travel.
“Group travel has always been on the periphery of the travel industry, so an innovative company is needed to solve this complex problem. In the past, booking apps have asked users to be a middleman,” the company said in a statement to BetaKit. “Now, they can book hotels, make restaurant reservations … all within one app.”
The app is set to launch in beta in the spring and will be made publicly available in the summer. By the time it launches, Launchtrip plans to offer a selection of more than 200,000 hotels in seven launch cities across the United States, with plans to offer more in the coming months. American Express and Resy, which offers back-end management software for restaurant reservations, are acting as Launchtrip’s official booking partners.
Launchtrip is launching its product at an interesting time for the travel industry, particularly as the COVID-19 pandemic has forced stay-at-home orders and global travel restrictions.
According to Statistics Canada’s data from October, the pandemic was projected to lead to a reduction in Canada’s gross domestic product between $27.9 billion to $37.1 billion in 2020 alone. The tourism industry was projected to be disproportionately affected by these losses.
Many tech startups operating in this market have noted although travel has been adversely affected by the pandemic, the long-term demand for travel is here to stay.
When Manitoba-based RocketRez (an operating system for tours and attractions) raised its $8.4 million Series A round in February, its CEO John Pendergrast told BetaKit he expects the travel market to bounce back in 2022.
Hussein Fazal, CEO of Snapcommerce (formerly SnapTravel), which recently raised $107 million, talked about a “pent-up” demand for travel that he predicts will lead to the market coming back in 2021 and 2022.
Bryan Del Monte, aviation and travel industry expert and president of The Aviation Agency, recently forecasted that travel in Canada will open up in the late third-quarter to early fourth-quarter of 2021. Similarly, a recent survey conducted by the Travel Health Insurance Association of Canada found that 80 percent of Canadians plan to travel in 2021.
According to a statement from the startup, Launchtrip began piloting an early-stage product before the onset of the pandemic and was able to generate approximately $1 million in sales. When the pandemic hit, the company said it was forced to close its pilots and “identify a sustainable path forward.” The company told BetaKit the startup retained 90 percent of its staff and now sits at 20 team members.
“With every catalyst and problem, there comes growth. The pandemic gave us a podium that didn’t exist before,” said Ing. “Consumers want travel to come back just as badly as the hospitality space. With travel coming to a near halt, we took the opportunity to refine our product, build better strategies and bolster financing.”
Launchtrip has also brought on a board of advisors that includes travel and tech industry experts who have formerly held leadership positions at companies like Expedia, MealPal, Tripping.com, and HomeAway.
Image source Unsplash. Photo by Annie Spratt.