itravel | Overview

itravel is a startup in the travel industry that several prominent investors of the industry have already invested in.

Among these are travel experts like Dr. Thomas Döring, the former executive of Thomas Cook and current director of Holidaycheck, Brent Hoberman, the founder of Lastminute.com, private investors with international success such as Christophe Maire, Florian Heinemann, who contributed to the success of Zalando, and the MIT professor Kenneth Morse.

In addition, the VCDE, Expon Capital and Howzat Ventures funds, which are focused on growth companies, have also invested in itravel. These have made successful investments in the travel and technology sector with investments such as Trivago, Lastminute.com and Hotel.de (more details on the investors in the section "Investors and Business Angels").

itravel uses the latest technology such as block chain and artificial intelligence on its website.

83% of all customers say that experiences, such as helicopter round trips, kitesurfing, and safaris, are the most important part of traveling. However, the largest online trip providers primarily offer flights and hotels. They do not offer experiences, which the traveler has to book on-sight or through a travel agency.

itravel is the first digital trip operator to offer its customers the opportunity to create their own trips by compiling and booking their desired experiences and activities online in advance.

Since experiences are the most important aspect of people’s vacations, itravel serves a very interesting market segment.

itravel applies the principle of machine learning, which stems from artificial intelligence, in order to predict matches between customers, seasons, and trip components. This way, itravel can appropriately pair its offers with the customer’s preferences.

By recording and evaluating click and search behavior, reservations, and customer information, we can statistically determine matching product characteristics and customer profiles.

Block chain technology allows itravel to directly book and pay providers in the country of destination for the desired travel packages. This eliminates the high costs of bank and credit card servicing fees.

Block chain plays the role of “electronic notary:” it confirms the reservation with the local provider directly and triggers the simplified payment process. After the booking is successfully completed, the digital currency is exchanged to the local provider’s currency at a favorable exchange rate.

itravel thereby removes the need for a middleman, providing a higher profit margin for both itravel and the provider in the country of destination.

The traveler also receives an improved and broader selection of options for experiences and adventures.

In the past fiscal year (April 2016-March 2017), itravel achieved a booking volume of €4.4 million. In the current financial year, itravel already reached this figure after eight months.

By March 2018, itravel plans to have a booking volume of at least €8 million, which corresponds to growth of 82%.

Co-Financing

As part of this co-financing round, the VCDE fund will invest in itravel anew with a sum of €200,000 along with four other investors with a total sum of up to €2 million.

In addition to VCDE, these include experts from the travel sector, such as the venture department of the travel group Emile Weber from Luxembourg.

In addition to the certified investment of VCDE of over €200,000, a total amount of €1.3 million was fixed within the framework of a term sheet. Conversations regarding the remaining €500,000 on the term sheet are currently running.

itravel’s goal is to become the international market leader for individualized trips within the next five years, and to achieve a high retention rate of satisfied customers through the usage of artificial intelligence and block chain technology.

itravel offers customers more than 5,000 travel combinations in 64 countries on all continents.

In comparison to established booking platforms, itravel particularly emphasizes experiences and activities such as round trips, mountain biking, or snorkeling as valuable travel elements, in addition to transportation services (e.g. flight) and accommodation (hotels, lodges, etc.). Experiences are the most important part of vacations for 83 % of all travelers.

For this reason, itravel’s trips are divided into experience and activity components that can be combined based on the customers’ preferences.

The online travel agency offers search functions, categories, and filters in order to compare and select trips from all destinations. The service center is software protected and supports customers via live chat, social media, telephone, and email more extensively than other agencies can, for example when changing trips that have already been booked.

itravel’s data analysis and tag algorithm makes sure that the travel suggestions match the customer’s profile, which creates a very tailored selection of options. This is particularly useful for complex round trips.

itravel thus removes the need for the middlemen of conventional tourism and can access the products of local providers directly. This creates savings of 36% for the customer, which would have gone toward the profit margin of the intermediary parties, and which can now be spent on better services on-site.

itravel saves costs and avoids mistakes through direct contact with the providers in each respective destination. This will continue to be expanded on the basis of block chain technology.

The online tour operator itravel generates revenue through the sale of trips to customers, who receive consultation by itravel directly instead of going to a separate travel agency. The customer books and pays for the trip through itravel, who is insured as an operator by the R+V insurance company and issues travel insurance per traveler.

itravel obtains its travel services (booked experiences and activities such as tours or safaris) directly from more than 850 providers in the respective travel destinations. itravel books flights by all airlines and car rental services through market-leading consolidators at the organizer's purchase prices.

itravel thus replaces the tourism industry’s conventional supply chain, in which the travel agency obtains services by the operator, who obtains them from the incoming agent (the travel agency in the destination country), who finally obtains these from the local provider.

This is how itravel reaches a gross margin of at least 18% and a net margin of at least 6% (planned to reach up to 14% by 2022) and is thus more profitable than any other online travel agency. These generally reach a gross margin of 12% at the most. Conventional tourism’s net returns of 2-3% maximum are also significantly lower than those of itravel.

Depending on the destination, itravel recovers up to 36% of the value for customers, which would otherwise go toward intermediaries’ profit margins.

Ongoing analysis of the various target groups’ seasonal demand determines marketing of the only direct sales channel, which is operated exclusively online and via social media on the basis of high-quality content that illustrates the unique trip components.

itravel is the only travel operator who offers the selection and compilation of individualized trips based on experiences and activities in all popular holiday destinations. The opportunity to receive consultation via live chat and create trips based on preferred experiences is unique to itravel customers.

In comparison to other Internet travel providers, itravel has the competitive advantage of purchasing directly from providers in the country of destination. Providers prefer to work with itravel because they earn more and pay lower transaction costs.

Additionally, itravel leads the way in terms of using modern technology such as block chain, machine learning and data analysis (artificial intelligence), categorization and search algorithms.

itravel's technology is protected by extensive copyright law in Germany, and is awaiting the approval of an international patent application.

Competitors

On one hand, itravel has direct competitors, who are pursuing the same approach. Examples are Fineway and Evaneos, however, these are startups that entered the market at the same time or later than us, have lower turnover so far, and who counterbalance limited experience with the necessary technology through design and labor-intensive service.

On the other hand, the market players, which itravel’s services are seeking to remove, are also relevant competition. In terms of customer service and consultation, itravel competes with conventional travel agencies such as the travel chain Hebbel or Droste. However, these are generally tied to catalogs by the operators and travel agency chain, and have limited online presence.

itravel faces this competition by combining its live chat service, which is available online even outside normal business hours, with the direct booking of travel components in the country of destination.

Online, itravel competes against Internet travel portals like Expedia and Booking.com. These providers are well-known brands online and are used to compare prices by many customers. itravel meets this competition by focusing on other product categories than the standard products offered by the competitors, by offering individual consultation, and by letting the customer combine experience-based travel components.

itravel also competes with large tourism companies like DERTOUR and Thomas Cook, who have strong purchasing power in so-called warm-water destinations such as Turkey, Greece and the Balearic Islands. However, these travel groups cannot apply their purchasing conditions and techniques to complex round trips and long-distance trips with a high volume of experiences, since local providers of these travel elements usually serve a variety of markets.

Beyond that, local providers do not want to grant these large tourism companies significant quotas and bow to the “travel giants’” seasonal marketing. Here, itravel compensates for its own comparatively small size through season-independent marketing that occurs earlier in the booking process.

Similarly, itravel beats specialized, smaller mid-sized operators by offering a variety of trips in more than 64 destinations independent of the season, and is years ahead of these operators in terms of technology.

itravel provides more than 5,000 trip combinations by a total of 853 providers in 64 countries. Among these are leading hotel chains like Banyan Tree or Hilton and car rental services like Sixt, in addition to local experience and round trip operators.

In its contracts, itravel agrees on so-called net rates (purchasing prices) with the providers. However, itravel does not assume obligations for minimum purchase quantities or quotas, so that it can adjust ist inventory in the customer’s interest at any time.

Rates are calculated such that sales prices are not above those that itravel customers would have paid while booking directly online or through a travel agency.

itravel works with the providers to secure special services and experiences that can be booked exclusively through itravel.  

As an Allianz premium partner, itravel offers several travel insurance options. itravel is also insured by the R+V insurance company and entitled to issue travel insurance certificates.

Tickets from all available airlines worldwide such as Lufthansa, Thai Airways and others, are issued by the ATO ticket factory according to IATA conditions. This ensures that itravel customers always have access to the best available fares.

The various itravel customer target groups have in common that vacation is one of their primary household expenditures. Therefore, our customers have a high demand on the quality and experience of their travels.

itravel customers spend an average of €5,000 per reservation. itravel is not restricted to a specific type of trip, but serves the demand for adventurous holidays with varying cost levels.

The market for individualized trips is growing more than 10% annually and, with a total potential of €120 billion, is already the most attractive sub-segment of the market in the EU. Traditional providers like TUI are having difficulties making their services flexible enough to address this market. This gives itravel the opportunity to position itself as the leading market provider.

In doing so, itravel unites the demand from a variety of market segments. The core segment of luxury trips with a value of more than 5,000 is estimated to be around €2.5 billion within German speaking areas alone. itravel is well positioned as a provider for this market.

However, itravel is already serving the second largest market segment in the same geographical area: middle-class individualized trips in German-speaking countries. This segment is valued at €6 billion.

itravel's market potential does not end here, however, since expansion throughout Europe would mean a combined volume of around combined volume of around €120 billion from both market segments.

This means that itravel can reach the goals laid out in the financial plan with a market share of 2% in the core segment of German-speaking luxury trips, a market share of 0.8% in the additional segment of customized trips of the German-speaking middle class, and a low market share of 0.2% for both segments in the European market.

itravel’s experienced founding team has divided the development of the company in four phases, of which two are already completed.

During the founding phase (2012 - 2013) and the development phase (2014 - 2016), itravel created the technological foundation, established the product range, and tested and proved the business model. Additionally, itravel built up and contractually secured its existing range of providers and travel services.

Goal of the current growth phase (starting in 2017), is to stabilize the company’s continuous growth and profitability. 2017 saw the achievement of reaching the cash flow break-even in half of the monthly periods.

Financing lays the foundation for sustainable profitable growth, as well as the expansion into surrounding EU countries. Intent of the expansion phase planned for 2019 is for itravel to become the leading provider for the market of customized travel.

The total sum of €2.5 million that can be generated through the Companisto funding round will be used as following:

The funds will be allocated in stages as follows:

Companisto investment stage 1: 100,000 EUR

• Preparation of follow-up financing
• Completion of two software modules to simplify direct flight and rental car booking

Companisto investment stage 2: 500,000 EUR

In addition to the measures of stage 1

• Hiring and training of new employees for customer service
• Expenses for sales and marketing
• Completion of a software module to plan roundtrips based on maps

Companisto investment stage 3: 1,000,000 EUR

In addition to the measures of stage 1 and 2

• Hiring and training of additional employees in product development and customer services, as well as additional expenses for sales and marketing
• Completion of block chain module for bookings with providers in the country of destination

Companisto investment stage 4: 1,750,000 EUR

In addition to the measures of stage 1 through 3

• Preparation of market entry in France and the expansion of business in Austria and Switzerland
• Patent application in the USA

Companisto investment stage 5: 2,500,000 EUR

In addition to the measures of stage 1 through 4

• Completion of the software modules to directly connect software with automated contract managers for all providers in increments.
• Software modules for automated categorization of products according to target groups along the principle of artificial intelligence
• Increase in reserves to secure customer deposits
• Prospectively: preparation of a token sale of the blockchain technology in cooperation with the Association of Airline Companies IATA

itravel was able to gain the support of prominent tourism and software experts as investors early on. The following are active and supportive advisors:

• Dr. Thomas Döring, former executive of Thomas Cook AG and current director of HolidayCheck AG.
• Brent Hoberman, founder of Lastminute.com and director of the Guardian Media Group, co-founder of the venture capital society ProFounders Capital, and member of The Business Council for Britain.
• Martin Varsavsky, founder of the WiFi service FON run by the Deutsche Telekom in Germany, a very successful entrepreneur with two IPOs, who is also an active member of the Clinton Foundation’s advisory council.
• Attorney Johannes Dähnert, an expert in travel and travel tax law, partner of the Ecovis consulting firm, and managing director of ATT Aviation Tax Trust GmbH

itravel was able to gain the investment of following business angels:

• Anil Hansjee, head of the strategic development of Paypal for EMEA, previously responsible for the Internet investments of the private equity firm EQT, and as member of Google's management team for corporate acquisitions in Europe.
• Fabrice Grinda, co-founder of FJ Labs and one of the three most successful Internet investors in France and the United States, particularly as an investor in Viajanet, Latin America's largest Internet travel platform.
• Prof. Dr. Kenneth P Morse, emeritus at the world's leading technology university Massachussetts Institute of Technology (MIT), member of the founding and management team of leading technology companies such as 3Com and Aspen Tech, a successful investor in various tech companies.
• Christophe Maire, leading angel investor for startups in Europe, whose investments like SoundCloud, Delivery Hero, and many more are very successful.
• Richard Cooperstein, who was once responsible for the internationalization of Facebook and has a long career as a senior executive with Paramount, Viacom and Disney, is a successful investor whose investments have reached a total capitalization of over 1 billion dollar.
• Dr. Christian Schultz, business angel of the year 2013.
• Florian Heinemann, co-founder and managing director of Project A Ventures, a Berlin-based incubator that develops companies in the Internet and mobile sectors, former employee of Rocket Internet, where he was significantly involved in the development of TopTarif, eDarling and Zalando/Bigfoot for five years.

itravel’s fund investors include:

• Expon Capital’s Digital Tech Fund, whose partners have been active in venture capital for 20 years and have been successful investors in the travel industry, with investments in Lastminute.com, Getaround and many software companies. Expon Capital has an advisory board made up of Google executives and Singularity University, which specializes in futurology.
• The Venturecapital.de fund VCDE, whose partners also have 20 years of experience in building and selling successful technology companies.
• TA Ventures, an internationally oriented fund that demonstrates successful investments in technology-driven travel companies, with investments in Dreamlines and the Bravofly listed on the stock exchange.
• Howzat Partners, a fund with extensive experience in the travel industry and successful investments in Trivago and a wide range of technology startups in the travel industry.
• BA4V Fonds, a fund co-invested by leading business angels.

itravel chose Companisto because Companists are also potential itravel customers and can provide valuable constructive criticism from both perspectives – as an investor and as a customer.

This is how you can support us:

• Try out the trips and webpages and give us your feedback
• Recommend us to your friends that are potential customers
• Let us know what additional kinds of trips and travel components you would like to see on our site in the future
• Carefully follow the preparations for the token sale for our block chain system and provide critical and supportive contributions here, too.

Team from left to right:
Manuel Fuchs, CTO; Shamini Arulanantham, CSO; Gerald Koenen, CPO; Axel Schmiegelow, CEO

itravel GmbH
Sechtemer Str. 5
50968 Cologne

Phone: +49 (0) 221 534109400
Email: companisto@itravel.de

Website: www.itravel.de
Facebook: https://www.facebook.com/itravel/