With Thanksgiving happening this week, the holiday travel season has officially begun — which serves as a great opportunity to remind ourselves of all the startups and established companies that are working on travel tech in the Boston area.
In helping Boston establish itself as a travel tech hub, startups have older tech companies like TripAdvisor, Kayak and ITA to thank — with the latter two being acquired by Priceline and Google, respectively.
Paul English, the co-founder of Kayak who’s working on his new startup, Lola Travel, told me these big three companies helped the Boston area breed tech talent that is specifically geared towards travel. He added that they also helped entrepreneurs “think about travel as a vertical to pursue.”
This has led to a number of travel tech startups being launched in the past few years, Lola included. Other travel tech startups in the Boston area include bus booking service Wanderu, flight rebooking app Freebird and cheap flights alert app Hopper.
“One of the main reasons Wanderu chose Boston for our headquarters is because of the existing ecosystem, featuring Kayak, TripAdvisor and many other travel startups, and the network that this presents,” Polina Raygorodskaya, CEO and co-founder at Wanderu said. “In the time we have been around, we have seen the travel tech space continue to grow.”
However, English said there is one thing stopping more startups being created in this area: noncompetes.
“I am deeply concerned about non-compete legislation which makes it near impossible to leave one of those companies and start a new travel company right away,” said English said. “I think this is atrocious, and that big company lobbyists have too much power in convincing the legislature to vote in the interests of big companies over the interests of innovation.”
Massachusetts lawmakers failed to reach a compromise in passing noncompete reform this year — which would have placed restrictions on the terms of noncompete agreements for employers and how they enforced them. English himself has recounted how a noncompete he had with Priceline after the Kayak acquisition slowed him down in starting up Lola.
Another challenge Boston faces as it continues to grow as a travel tech hub is investor shyness as more startups continue to pop up in the space, Raygorodskaya said.
“There are a lot of opportunities, but a lot of entrenched players as well.”
“Due to the large amount of travel startups out there and the fact that the large companies own such a large portion of the market, many investors shy away from travel as a category unless the startup is doing something very unique or targeting a niche market that is not currently being served,” she said.
Ethan Bernstein, CEO and co-founder at Freebird, pointed out a similar challenge.
“Travel is a large, complex, and mature industry — and unfortunately most who are new to the industry fail to internalize how many challenges that presents,” he said. “It is rare for a startup without employees who have travel experience and connections to make a splash.” However, he added, “thankfully there is a lot of business, tech, and data science talent in Boston that has travel experience.”
As far as the opportunities that exist for startups working in travel, Bernstein said “the sky is the limit,” pointing to travel as a $1 trillion-plus industry “built on old technology.” He added, “There are a lot of opportunities, but a lot of entrenched players as well.”
Lola Travel was born out of English’s Blade startup incubator he started in Boston’s Seaport after leaving Kayak, post-acquisition. It was revealed earlier this year as a messaging app that connects you with human travel agents to simplify the booking processing for travelers. Lola has raised $20 million from General Catalyst and Accel Partners, and it has made two acquisitions.
Hopper started in 2008 as a service to help users find new travel destinations, but it pivoted in 2015 into a mobile app that alerts users when they can book the cheapest flights. The pivot has appeared to pay off, with both Google and Apple recognizing Hopper as a promising new travel app. It has raised nearly $40 million from investors, including Atlas Venture and Brightspark Ventures. Its CEO is Frederic Lalonde.
Freebird launched its service last fall that instantly rebooks your flight if it gets canceled, delayed or if you miss your connecting flight. It recently announced a partnership with Corporate Traveler, a brand of Australian travel giant Flight Centre Travel Group that manages business travel programs for small- to medium-sized enterprises. The startup has raised $3.5 million from General Catalyst, Slow Ventures, Accomplice and angel investors.
Fuzzy Compass is an online service that helps travel bloggers and “influencers” monetize their audience by giving them opportunities to help travelers plan custom trips. The Boston startup’s CEO and founder is Sasha Hoffman, who was previously head of business development for online payments provider Plastiq and an investment banking associate at Goldman Sachs.
PlacePass is new Cambridge startup that “helps travelers find and book sightseeing tours and other experiences in cities around the world,” according to The Boston Globe. Its co-founders are Ethan Hawkes and Emily Bernard.
RueBaRue is a new startup with an app that automatically generates shareable travel itineraries for you based on the destination you enter. The startup’s CEO and founder is Nars Krishnamachari.
Wanderu is a service that lets you search for inter-city trips on trains and buses across multiple transportation providers, and it has received recognition from Richard Branson and SXSW since launching. It has raised $8 million from a number of investors, including 500 Startups, Techstars co-founder Brad Feld, Marc Bell Ventures and Compound.