Snaptravel’s founders are venturing outside of the world of hotel and flight bookings to bring the startup’s model to other e-commerce verticals.
Snaptravel has created Snapcommerce, which will act as a new overarching brand with the goal of launching a number of other brands under the ‘Snap’ banner.
“From the very start, we had this vision that consumers want to have more meaningful relationships with…brands.”
“From the very start, we had this vision that consumers want to have more meaningful relationships with the brands that they buy from,” Hussein Fazal, who has assumed the mantle of Snapcommerce CEO, said in a recent interview.
“We’ve always believed in this vision and we just happened to start and launch with what everybody knows, which is Snaptravel,” he said.
Snapcommerce and future brands will operate under Wise Travel Technologies, the same legally registered business name behind Snaptravel. Fazal told BetaKit that he now considers Snaptravel the first of many future brands that will be under the broader Snapcommerce umbrella.
Fazal and his co-founder Henry Shi (CTO) launched Snaptravel in 2016. The startup’s platform, powered by AI, allows users to find and book hotels and flights through conversational tools like SMS and Facebook Messenger. In late 2018, Snaptravel closed a $28 million CAD Series A round, with backing from the likes of Telstra Ventures, the venture arm of Australia’s largest telecom company, and NBA player Stephen Curry.
Since launching, Snaptravel has garnered more than 2 million users. The startup also claims to have driven more than $350 million USD in sales, which it attributes to building a “trusted relationship with consumers” through its predictive AI and chat features.
Snapcommerce will use the AI-powered platform behind Snaptravel to expand into new verticals. Fazal noted that with this vision for Snapcommerce in mind, Snaptravel had developed a “flexible, AI-driven platform, that is agnostic of vertical,” making it possible to transition the technology.
Snaptravel began revving up for its expansion near the end of 2019. Having found traction and success with hotel bookings, the company decided to begin building its idea for a larger direct-to-consumer (D2C) e-commerce company, Fazal told BetaKit. According to Fazal, the company has yet to raise capital specifically for the Snapcommerce brand, but has garnered interest from potential investors for future rounds.
To fuel the launch of Snapcommerce, the company acquired the intellectual property assets of Canadian chatbot marketing startup ChatKit AI, earlier this year. Fazal declined to disclose the purchase price of the deal.
ChatKit AI was founded in 2016 and led by Mazdak Rezvani, who has since joined restaurant marketplace ResQ. Much like Snaptravel, ChatKit AI connected consumers with businesses through conversational channels, also utilizing AI. Its customers included D2C brands like MeUndies and Reese Witherspoon’s clothing line, Draper James.
Snapcommerce plans to leverage ChatKit AI’s technology to build out its vision for an all-encompassing e-commerce company.
The timing of the move beyond the travel realm comes in a year of turmoil for the travel industry, brought about by the COVID-19 pandemic.
In the United States, one of Snaptravel’s major markets, the hospitality industry continues to struggle. Recent data shows that, on average, hotels are below 50 percent capacity, with two-thirds less than half full. While these numbers may be troubling, they still are up from lows in March and April.
In March and April, Snaptravel saw a 70 to 80 percent drop in sales, leading the company to lay off many of its staff. Fazal refused to provide the exact number of people Snaptravel laid off but claimed that it was between one-quarter to one-third of the startup’s team, which currently sits at 150 (including customer service staff). Snaptravel also cut its co-founders’ pay and utilized the Canada Emergency Wage Subsidy.
Even as the second wave of COVID-19 infections leaves the state of the hospitality industry up in the air, Fazal said Snaptravel has seen a resurgence in the usage of its platform. The CEO pushed away the idea that Snapcommerce represents a pivot for Snaptravel during a time when the travel industry is struggling.
“I would see this as an expansion,” Fazal argued. “Our travel business … has actually been growing and we’re actually above pre-COVID levels. So, we’re going to continue to invest heavily in Snaptravel, we’re going to continue to grow the hotels and flights businesses. This is just a natural expansion based on what our customers are asking for.”
Fazal attributed the return to pre-COVID level sales, in part, to the rise in domestic travel in the US. With COVID-19 limiting travel to shorter distances and shorter stays, Snaptravel’s AI is able to more easily target and predict where customers may want to visit – offering, Fazal argued, an even more personalized approach.
According to Fazal, Snaptravel is now back in growth mode and hiring. The company is currently in a “testing and planning” phase as it looks to spin up new brands. One vertical the company is exploring is event ticketing, while others could include restaurant bookings, or even the sale of goods.
“A lot of that is actually coming from our … existing consumers,” said Fazal, who noted that Snaptravel users may use the platform to book hotels, but will enquire about things like local restaurants as well.
“[Our consumers are] often looking for a lot more than what we offer right now,” the CEO said. “They’re looking for restaurants, they are looking for tickets, for tours, for activities, they’re looking for goods, [and] they really want more. And as we can provide more to them, obviously, that helps the business.”