TripAdvisor: Elevating People Functions to Business Partnership

Part 1: Aligning HR with Business Strategy

When Beth Grous joined TripAdvisor as Chief People Officer, the popular travel platform was growing rapidly, with 40+ locations around the world. Beth quickly moved to develop Human Resources (HR) as a strategic partner for business functions, so that the team’s initiatives would more directly support company objectives. In this first part of a two-part conversation, Beth talks with TCV GP Nari Ansari about how she re-oriented her team for business partnership. She also explains how her team manages the employee journey within TripAdvisor as strategically as the company manages its customer journeys, so that recruiting and retaining talent is both systematic and flexible for an increasingly diverse workforce.

***

Nari Ansari: First off Beth, I really appreciate you taking the time to chat with us. It was great seeing you at TCV’s East Coast CHRO event in New York with portfolio company people and talent leaders. We had some great conversations and wanted to share a few topics with a broader audience.

Beth Grous: Absolutely. Great to speak again.

Nari Ansari: Let’s dive right in, starting with TripAdvisor. What does the company do?

Beth Grous: I think most people who have traveled, or know someone that’s traveled, are familiar with TripAdvisor. We are the world’s largest travel platform. We help about 490 million travelers every month plan, book, and get excited about having the best trip of their life. We’re a global website, and we also have a mobile app that helps travelers browse more than three-quarters of a billion reviews and opinions on over eight million restaurants, accommodations, experiences, airlines, cruises, and so on.

Nari Ansari: When did you join? What motivated you to jump onboard?

Beth Grous: I joined TripAdvisor in September of 2015. I’ve been a review writing member on the TripAdvisor platform since 2006 so I was a long-time consumer of the brand and loved it. When I got the call about the job, I thought that it would be a unique opportunity for me to take the HR skills, experience and capabilities that I had, and intersect them with a consumer brand that I have a lot of passion for.

Around the same time frame there was an increasing recognition at TripAdvisor that with 2,500 employees, and the company growing globally, we really needed to elevate the people function to work in partnership with the CEO to execute more strategically against our business and talent priorities. And so that was very exciting for me as well, thinking about the potential impact I could have.

Nari Ansari: Absolutely. You’re titled Chief People Officer, so what areas fall under your responsibility?

Beth Grous: That’s a great question, because my job description is perhaps a little different than most heads of HR.

As Chief People Officer, I have all the traditional HR domains:

  • HR business partners
  • Total rewards (compensation and benefits) and HR systems
  • Talent acquisition (our recruiting engine)
  • Learning and organizational development
  • Equity, diversity, and inclusion

In addition to those more typical functions, I have a few other areas of responsibility, including our global real estate portfolio and office experience for our 40+ offices worldwide, and our social impact function, which is a combination of both our TripAdvisor Charitable Foundation and our employee volunteerism and giving activities.

Nari Ansari: Since you became Chief People Officer, how have you established the HR team as a business partner to the rest of the organization? What steps did you take, what lessons did you learn as you industrialized the function, and what advice would you have for other HR leaders of growing tech companies out there?

Beth Grous: When I joined, I looked around and I said, “There are some places where we have real strengths, and some places where we need to fill in some blanks.” Probably the biggest shift we made was to build out an HR business partner (HRBP) function – we wanted to shift a portion of our team from being more focused on tactical day-to-day priorities to taking a pro-active focus towards business objectives and working with their counterparts throughout the organization. That shift in focus meant that some people stepped up to develop their skills and to work differently. Other team members transitioned out of the organization and, also importantly, we had a few members join from the business side.  It was a significant shift to staff and organize this HR business partner team.

Nari Ansari: That’s an impressive shift. Tell us a bit more about the role and skill set of HR business partners.

Beth Grous: The members of our HRBP team are expected to have a deep understanding of the business—financials, strategy, and how each business function aligns and interacts to execute against those objectives. I encourage the HRBP team to frame their day-to-day work by asking the question: “How am I working with people at all levels of the organization to help drive the business forward?” Much of this learning happens on the job—and our business leaders are very supportive of sharing their expertise. It has been an important shift for us, because with this knowledge and understanding, they can then support the business most effectively: defining the right organizational structure to support strategy, ensuring that we are hiring and developing a diverse and talented group of employees across the organization, and aligning rewards, as some examples.

I am fortunate that I work for a CEO and with an executive team who greatly values the input of our people and human capital team on matters not just related to HR domain areas, but also matters related to the overall business. This has been exciting and fulfilling for me and my team.

Nari Ansari: That’s great. I think what’s top of mind for many company leaders and talent leaders is retaining exceptional talent. You talked a bit at our recent TCV CHRO event that TripAdvisor very methodically thinks through, manages, and monitors the customer journey and that you and your team symmetrically are methodically thinking through, managing, and monitoring the employee journey as well. Can you talk a little bit more about what that looks like for your 3,600 plus TripAdvisor team members today spread across 40+ offices?

Beth Grous: I’m going to make an obvious statement here. If you retain and engage more of your workforce, you have less of a need to recruit people…

Nari Ansari: Right.

Beth Grous: We recognize that those two things sit in a very healthy and logical balance. We also recognize that turnover in and of itself is painful. You lose institutional knowledge. It’s disruptive to teams. It slows throughput. It slows innovation. We’re only as good as the people that we have working in the right teams and right configurations to execute against our business objective. We think a lot about how to make TripAdvisor a great place to work, to encourage not only retention, but also to drive engagement and satisfaction. Just like our sales team thinks about the “customer first”, we think about how we can put our employees first. That also means that we are taking their views into account, so it’s not just about delivering “HR services” to our employees but having a dialogue with them. This aligns with our brand, which is all about transparency and providing honest and constructive feedback. For example, we know that what makes a company a great place to work likely means different things to different people. To someone early in their career, that might mean, “I get to have a lot of different experiences and I’m promoted pretty rapidly.” To someone in a different phase of life or with different interests or needs, that might be that an individual wants a lot of flexibility in terms of the hours when they work or the places where they work. We encourage flexibility, and we also have office spaces with many different places where people can get away from their desks if that helps them work more effectively. We think about our workforce just like TripAdvisor (and many consumer-facing companies) think about their customers, recognizing that one size doesn’t fit all. That does not mean that we can necessarily be all things to all people—but we try hard to listen, learn, and discern what’s most important to our workforce, and meet our employees’ needs, as long as it makes sense for the business. 

I believe that there are some things that transcend all employees, regardless of role, experience or tenure. Employees want to come to work at a place where they understand the business objectives, they understand the strategy, and they know their role, how their role ladders up to executing against that strategy. So as a company, we spend a ton of time being transparent about those elements – we do that through company town halls, through company meetings and through various forms of communication. Communication is so important, and I don’t think we can ever do enough of it internally! We’ve found it critical for our employees to understand the business context and importantly, how they fit into that context, so that they can be most successful—and therefore we can be most successful as a company.

Nari Ansari:  That makes a lot of sense. I do think that having a much more rigorous multi-faceted view of your employee base is becoming critical for companies of all sizes and in all industries.  And I also think open communication across the organization is important, particularly when it feels like change is the only constant these days.

Another trend – and transition – we are seeing is that HR is becoming more tech and data driven to deliver on human capital and business goals. We’ll talk more about this in a follow-up Q&A and address other topics that are top of mind for today’s HR professionals and tech companies, including HR’s role in successfully executing acquisitions. Thanks so much for sharing your thoughts with us, and I look forward to our next conversation.

Beth Grous: My pleasure!

###

The statements, views, and opinions expressed are those of the speakers and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the speakers and disclaims any responsibility therefor. This interview is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified, if any, are not necessarily representative of all TCV investments and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies. For additional important disclaimers, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.


FlixMobility Completes New Funding Round Led by TCV and Permira

  • Funding round completed with strategic investments from TCV, Permira and existing investors
  • Financing will fuel expansion of FlixBus network in the United States as well as market-entries in South America and Asia and the rollout of FlixTrain
  • FlixCar ride sharing brand to launch in 2020 to complement existing bus and train networks in EU

New York/Munich (July 18, 2019) – FlixMobility GmbH, the parent company of global mobility platforms FlixBus and FlixTrain, has announced the completion of its Series F funding round co-led by TCV and Permira, two of the largest growth equity firms backing private and public technology companies. Long-time investor HV Holtzbrinck Ventures also participated in the round through a joint co-investment with European Investment Bank, providing local expertise and expert knowledge to scale the business further. The newest FlixMobility investors join existing shareholders including General Atlantic, a leading global growth equity firm, and Silver Lake, a global leader in technology investing, who have helped the company rapidly grow from start-up to global mobility provider.

The equity raised will be used for global expansion as well as the launch of new FlixMobility products. FlixBus is targeting market leadership in the United States and will launch into new global markets in South America and Asia in 2020. For the FlixTrain brand, the investment will help expansions into new EU countries following the liberalization of the European rail market in 2020 in addition to growing the product within the German market where FlixTrain already operates multiple cross-country routes. Furthermore, the investment will be used to launch FlixCar, a ride sharing platform that will complement the existing FlixBus and FlixTrain networks.

“What began in 2013 as a German startup has become a powerful mobility platform that continues to change the way millions of people travel across Europe and the United States,” said Jochen Engert, CEO and founder of FlixMobility. “Through our strategic partnership with TCV and Permira, which have decades of experience and a portfolio of world-leading technology companies, we will accelerate our growth to offer smart and green travel to more people across the world via the FlixBus, FlixTrain and soon FlixCar brands, while strengthening our position in existing markets.”

“We could not be more excited to partner with Jochen, André, Daniel and the entire FlixMobility team,” said John Doran, General Partner at TCV. “We have been following their success for a number of years, and greatly admire what they have been able to achieve over this time. TCV’s strategy is to back companies led by visionary founders and offering superb value propositions to its customers and partners – we believe FlixMobility does exactly that.”

“We are very excited to join the ride with FlixMobility and its founders in the future. They have written an impressive success story and transformed the company into a leading global mobility platform for mid-and-long distance travel. With our proven expertise in the technology sector, we look forward to supporting FlixMobility’s strong management team in the next phase of the growth strategy focusing on further internationalization, acquisitions and the expansion of the train offering”, said Stefan Dziarski, Partner at Permira. “With the investment in FlixMobility, the Permira funds underline their position as one of the largest technology investors in Europe. FlixMobility – with its high growth rates and global footprint – is a perfect fit for the new Permira Growth Opportunities Fund, focusing on larger minority investments in our core areas of expertise.”

Both John Doran, General Partner at TCV, and Stefan Dziarski, Partner at Permira, will join FlixMobility’s Board of Directors.

From German Startup to World-Leading Mobility Player
Revolutionizing European long-distance travel since 2013, FlixMobility is a provider of convenient and affordable intercity travel to millions of passengers, with 45 million people using FlixBus and FlixTrain in 2018 alone, through 350,000 daily connections to over 2,000 destinations. FlixMobility is the undisputed market leader across Europe and expanded to the US in 2018 for service to a total of 29 countries. The company works with more than 300 independent bus and train partners and has created over 10,000 jobs in the industry.

In 2018, FlixTrain was launched, bringing the FlixBus model to the rail industry in Germany. In 2019, the company also applied for rail tracks in Sweden and France in preparation of expanding FlixTrain with the upcoming liberalization of the European railway.

Approximately 1,300 employees work for FlixBus and FlixTrain within 19 offices in 17 countries. By working with employees on the ground within FlixBus markets, the company is able to consistently adapt to both the market and local customer needs.

Options for Every Traveler: The Launch of FlixCar

With FlixBus and FlixTrain, FlixMobility offers an ever-expanding and integrated network, enabling people to plan flexible and customizable journeys. In an effort to bring smart and green mobility to even more people – and to offer even more door-to-door connections – FlixMobility is preparing the launch of FlixCar, a car-pooling service perfectly suited to expand the network offering to even more destinations.

“From the very beginning, we have positioned ourselves not as a bus or transportation company, but rather a mobility provider: we offer smart, affordable and climate friendly travel, whether by bus, train or – soon – ride sharing,” said Engert. “FlixCar is a logical next step in extending our network so that we can enable even more people to experience the world. On average, the occupancy rate for cars is a mere 1.5. Ride sharing is a great way to split fuel costs and lower your impact on the climate.”

MEDIA CONTACTS:
Brittany Posey, FlixBus
brittany.posey@flixbus.com
+49 (0)89 235 135 132

Katja Gagen, TCV
kgagen@tcv.com
+1 (415) 690 6689

About FlixMobility

FlixMobility is a young mobility provider, offering new alternatives for convenient, affordable and environmentally-friendly travel via the FlixBus and FlixTrain brands. Thanks to a unique business model and innovative technology, the startup has quickly established Europe’s largest long-distance bus network and launched the first green long-distance trains in 2018 as well as a pilot project for all-electric buses in Germany and France. Since 2013, FlixMobility has changed the way over 100 million people have traveled throughout Europe and created thousands of new jobs in the mobility industry. In 2018, FlixMobility launched FlixBus USA to bring this new travel alternative to the United States.

From locations throughout Europe and the United States, the FlixTeam handles technology development, network planning, operations control, marketing & sales, quality management and continuous product expansion. The daily scheduled service and green FlixBus fleet is managed by bus partners from regional SMEs, while FlixTrain operates in cooperation with private train companies. Through these partnerships, innovation, entrepreneurial spirit and a strong international brand meet the experience and quality of tradition. The unique combination of technology start-up, e-commerce platform and classic transport company has positioned FlixMobility as a leader against major international corporations, permanently changing the European mobility landscape. Further company news and pictures can be found in the newsroom.


About TCV

Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. Since inception, TCV has invested over $11 billion in more than 250 companies and has helped guide CEOs through more than 120 IPOs and strategic acquisitions. TCV has deployed over $1.5 billion in Europe. TCV’s investments include Airbnb, Believe Digital, Dollar Shave Club, EmbanetCompass, ExactTarget, Expedia, Facebook, Fandango, GoDaddy, HomeAway, LinkedIn, Netflix, RELEX Solutions, Rent the Runway, Sitecore, Splunk, Spotify, Sportradar, The Pracuj Group, TourRadar, WorldRemit, and Zillow. TCV is headquartered in Menlo Park, California, with offices in New York and London. For more information about TCV, including a complete list of TCV investments, visit https://www.tcv.com.


Reshaping Online Travel and Surpassing AU$100M ARR From Sydney

Silicon Valley does not have a monopoly on innovation. Great entrepreneurs are everywhere, and we have seen a strong software ecosystem emerging from Australia and New Zealand.

We recently profiled Rod Drury’s Xero journey building a global platform out of New Zealand. Meanwhile, another TCV company, SiteMinder, just reached an important milestone of AU$100 million ARR.

SiteMinder has methodically built a global SaaS leader in hospitality out of Sydney, Australia. Coupled with its impressive revenue milestone, SiteMinder has 35,000 hotel customers in 160 countries and is reshaping the hotel distribution value chain and online travel, itself.

TCV’s Dave Yuan caught up with founder Mike Ford to reflect on his journey.

***

Dave: Congratulations, Mike! Hard to believe you’ve grown SiteMinder to AU$100 million ARR. That’s an incredible milestone and a great foundation for things to come, but let’s start from the beginning. Tell us about yourself and how you got here.

Mike: I always had an interest in technology and commerce, having majored in both. This led me to consulting, where I worked on large business intelligence projects for the likes of SABMiller, AngloGold Ashanti, and Chase Bank, bridging technology teams with executive management and getting a good grounding in both disciplines. Being passionate about travel, I embarked on a year-long backpacking adventure in 2000 before I arrived in Australia and took on a three-month contract with a health technology startup to fund further travel. In 2006, I founded SiteMinder, and I am still in Sydney 18 years on, so, clearly, my adventures didn’t work out as expected!

Dave: Tell us about the SiteMinder creation story. What was the original insight? When did you know you had an idea good enough to quit your day job?

Mike: I didn’t quit outright and that was key. I consulted for my then-employer, two days a week, in order to fund the early months.

There were two major influences that led me to take the leap.

The first was the health tech startup I was working at. They were digitising paper-based claims sent from hospitals to medical funds for reimbursement, as paper-based claiming involved a long payment and reimbursement cycle. For hospitals, the digitisation of claims meant instant delivery, faster reimbursement, and a clear digital trail. At the core of the engine was a switch that converted data from different hospital systems into formats digestible by different medical fund systems.

The second influence was an investment I’d made in an accommodation business. Through that, I learned how hotel and other accommodation sales were rapidly moving away from traditional channels, such as wholesalers and brick-and-mortar travel agents, to online booking sites as travellers were increasingly turning to the internet to make their reservations. The shift in consumer behaviour drove a proliferation of last-minute booking sites in Australia at the time, such as Wotif.com and lastminute.com.au, which promised huge discounts if you booked close to the date of your stay. The issue for hoteliers was there was no means of centrally managing all of those websites and keeping their room rates and availability continuously up to date on each. So, they often chose to list on only one or two sites and miss out on others because they couldn’t manage them at scale.

I quickly realised that if I could connect hotel systems with different online channels, as I did in the medical funds world, I could synchronise hotel room rates and availability in real time. For hoteliers, the value proposition was they could get more rooms onto more booking sites to grow their reach online. At the same time, they could reduce overbookings and the operational overhead of manually inputting reservations. That value proposition helped us get a strong foothold quickly in the market.

Dave: What was it like to start a company out of Sydney?         

Mike: We were actually very fortunate to be in Sydney. As with banking and payments technologies, Australia was far ahead in terms of technological innovation in online travel. Where other markets weren’t yet embracing dynamic room rates and availability, there were many booking sites in Australia available for hotels to list on. The multitude of sites, combined with the sheer number of hotels out there, especially independent hotels, meant that conditions were ideal for our entry into the market.

Funding was a big challenge as the technology venture market was very underdeveloped relative to what it is today. The government in Australia also had a myopic attitude to how important tech and STEM jobs were to the future of the economy, so tech startups got very little support in terms of R&D benefits, and sadly that hasn’t changed. In spite of these challenges, more than 80% of our revenue now comes from overseas markets. We are a truly global business that has kept its roots deeply in the city of Sydney where it all started.

Dave: You’ve scaled past AU$100 million ARR. Was it all smooth sailing from there, or were there big doubts and moments of near death?

Mike: In the early days, moments of doubts may have been around survival. Later, they were more focused on growth or new market entry, but they’ve never quite ceased, and I suspect it’s no different for any founder.

If ever there was a near-death experience, it would’ve been pre-angel investment, when I was funding the business and paying my co-founder out of my own savings. On top of that, we learned a competitor was launching a month before us, and they had AU$100 million in funds and an existing product. We had AU$180,000 and a beta release. It was nearly a no-go decision, but I’m pretty stubborn and so we took them on, and they soon went bankrupt.

Dave: What were the big decisions along the way?

Mike: Very important decisions included:

  1. Who we were going to take money from and bring on to our board of directors. We turned down early interest from numerous VCs purely on the first meeting dynamic.
  2. Whether we were going to go global or dominate locally, and what the timing would be.
  3. What not to chase. There are so many opportunities, and you can lose focus quickly unless you’re very clear about what you are and are willing to let go of opportunities that may seem attractive but don’t provide long-term benefits.

Additionally, the most crucial decisions involve the people you choose for the journey and the timing of bringing on key talent. The outlook of a founding CEO, certainly in the formative years, can differ substantially from those of a professional CEO. As a founding CEO, you have grown the team and the business from nothing. You have loyal, committed, and talented individuals who have helped you get the business to a particular stage so the company culture is more familial. Yet, through high growth, it’s hard to stay on top of skills and challenges across the business, and you may find yourself in a situation where you either don’t recognise that such deficiencies exist, or you don’t take appropriate measures quickly enough to address them. Over time, you get better at identifying the skills you need for the future, ahead of the curve.

Dave: How has SiteMinder succeeded in a field that has gotten so much competitive attention?

Mike: I think the definition of success is different for everyone. There are many travel tech companies that I would consider successful, even if they may not all have the size and growth trajectory of SiteMinder.

It sounds cliché, but it comes down to the deliberate process of ensuring many ingredients come together in the right way, at the right time, and in the right sequence. We’ve had a focused and smart go-to-market strategy, plus we over-indexed on personalised support for our customers and doubled down on localising our products and service for many different countries. We’ve invested in strong operational centres around the globe to provide true round-the-clock sales and customer service, and we’ve hired smart people. I could go on, but at our core we are product-driven and customer-obsessed. That permeates our culture and is key. Even if your product is average, you can have early success if your sales and marketing are great. In the long run, you can only continue your success if your product is truly market leading.

Dave: As you look forward, what are the big opportunities for hoteliers? How might this translate into benefits for the consumer and traveller?

Mike: Many hoteliers are still stuck in their traditional ways and aren’t open to the possibilities that technology can offer in making a world of difference. This does vary between hotel segments such as independent versus chain, full service versus limited service, regional versus city, and even by country. The vast majority of hoteliers still struggle to navigate the changing online landscape and are overwhelmed by the extent of the choice out there.

It’s for this reason that we’ve created an ecosystem, not just of our own technology, but of all other technology players that can help hoteliers navigate the online world in search of guests. If hoteliers can connect with customers at every touchpoint throughout their buying journey, they can ultimately create greater guest experiences long before those guests set foot in their lobby and long thereafter.

Dave: If SiteMinder fulfills its mission, what role can it play in the changing online travel ecosystem?

Mike: SiteMinder currently connects to 700+ partners within the travel ecosystem, so hoteliers can hook everything they need into their property management system and harness the power of integration, openness, and choice. Essentially, our platform is the most comprehensive and effective way for hoteliers to bring guests to their hotels, without having to think about or manage technology. It gives them more time to spend on the guest experience, which is the part they really enjoy.

If hoteliers can choose any best-of-breed solution to optimise their opportunities in acquiring guests in an increasingly online-driven world, we’re doing our job.

We also play a big role in the value chain in online accommodation, specifically the supply equation, by connecting hotel room rates and availability in real time to points-of-sale such as booking sites. We enable those booking sites to gain traction in core markets, where they otherwise can’t access a supply of rooms to sell.

There have been middlemen aggregators in the past that have rolled up supply for booking sites yet we connect the room supply directly to booking sites or room demand sources, so there is no ticket clipping and dilution of margin between the supplier (the hotel) and the seller (the booking site). In doing so, we have streamlined the supply chain for hotel rooms, rates, and content.

Dave: SiteMinder’s opportunity is also unique as a SaaS company. Vertical SaaS is seeing a renaissance with SaaS companies taking on platform and network characteristics, meaning “SaaS as a Platform”. What does SiteMinder look like as a SaaS business model over time?

Mike: We started out with a distribution platform for hotels. Over time, we recognised the importance of the direct sales channel and expanded our platform to integrate a hotel’s own website, so they could manage both their indirect and direct sales channels.

Over the years we’ve designed our platform to be more proactive and have powered it with business intelligence that steers our customers and makes them aware of opportunities to improve their hotel business. For example, our platform makes hoteliers aware of changes in market conditions or demand, so they can maximise their guest acquisition capabilities in a rapidly evolving online landscape.

The next evolution is really exciting. We recognise that there are many great applications and tools out there for hoteliers, and they can all improve a hotel’s guest acquisition strategy. These may be upselling tools, airport transfer services or activity bookings, revenue management systems or anything in between. We know that one company will never build the best of all these things. Our brand essence has always been one of openness, so we’ve developed a way to seamlessly link a hotel’s property management system to all the different applications. In doing this, our customers will be able to use all the best-of-breed applications available out there in combination with our own platform. If we are successful in this endeavour, we will have the most open and connected platform the hotel industry has seen, with the greatest number of hotel participants (we already have 35,000 today).

Dave: Outside of SiteMinder, what in online travel gets you excited?

Mike: One important shift is the rise of tours and activities moving increasingly to online with dynamic inventory and pricing. Driving this is people’s desire to seek experiences, not just flights and accommodation. We’re seeing increasing demand among consumers to package their accommodation, services and ancillaries, so they can get the best experience out of their accommodation and the local destination.

Somewhat tangential is the rise of personalisation. For a more personalised experience, including destination advice, many travellers still use a brick-and-mortar travel agent to plan their trip. That said, we’re also seeing the growing dominance of online booking sites. Alone, neither of these options is ideal for at least one segment of the leisure travel market, so I think we will increasingly see hybrids where booking sites get better at offering deeper, more human advice and personalised service. This may even include speaking to a local human expert when booking online. We are already starting to see signs of that happening now.

There are also relatively new entrants like Google making a wave in the space with disruptive models that are attractive to hoteliers. I think the race is on for OTAs to create a seamless end-to-end experience for the consumer, including research and advice, flights, hotels, car hire, transfers, in-destination activities and experiences, restaurants and everything in between.

Dave: Thanks so much, Mike, and congratulations again! AU$100 million ARR is an amazing milestone that only a few reach. Savour it!

###

The statements, views, and opinions expressed are those of the speakers and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). TCV has not verified the accuracy of any statements by the speakers and disclaims any responsibility therefor. This interview is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. The TCV portfolio companies identified, if any, are not necessarily representative of all TCV investments and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies. For additional important disclaimers, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at
https://www.tcv.com/terms-of-use/.


This is the biggest trend in hotel tech that you’ve never heard of


Originally published at https://hoteltechreport.com on May 2, 2019.

Creating revolutionary technology for hotels has historically been a slog but lately we’re seeing a change in fate for hotel software companies due to increased investment in the space. One of the biggest investors in hospitality tech is Menlo Park based TCV, the growth equity firm that has invested in breakout companies like Sojern and SiteMinder within hotel tech. TCV has also made major investments in the broader hospitality and travel space such as: Airbnb, TripAdvisor, HomeAway, Expedia, Orbitz, SeatGeek and Toast.

TCV is one of the largest names in the world of technology investing with a successful track record in the massive hospitality and travel vertical. Vertical market software is an extremely hot investment theme right now.

“The easy opportunities for disrupting old-line industries are drying up. Now, many of the up-and-coming start-ups that may become the next unicorns have names like Benchling and Blend. And they largely focus on software for specific industries.” New York Times

Long time TCV investor and former SiteMinder CFO John Burke is excited about the opportunities within the vertical market software. John and his team have identified a trend within a sub investment theme that they’ve coined: “SaaS as a Network”. Here’s how they describe the concept.

“When a SaaS provider starts serving a high enough density of merchants, they can leverage that strength to build two-sided marketplaces with the merchant’s customers, suppliers, and employees.”

David Yuan, TCV General Partner

The general hypothesis is that once vertical market software companies achieve scale with regards to their core products they can always bolt on new point solution functionality but would be wise to focus on a much bigger opportunity. Specifically, TCV believes that these software companies can create two-sided marketplaces that connect their users to new channels of customers, suppliers and employees. Back in February, Hotel Tech Report identified the explosion of marketplaces as one of the 5 biggest tech trends at ITB Berlin, a trend that mirror’s TCV’s investment thesis. Of all the software companies creating marketplaces in hospitality, TCV’s portfolio company SiteMinder has the largest scale to date.

Image from David Yuan’s article SaaS as a Platform, SaaS as a Network

Last year SiteMinder threw its hat in the ring with the launch of SiteMinder Exchange aimed at “breaking down the industry’s notorious integration barriers, connecting hotel systems and applications through smart and simple connectivity.”

“The reality is that few industries are as fragmented as hospitality particularly at the PMS level. There has always been demand for many of the new applications, but innovation has been stifled by lack of connectivity and the sales model makes the economics challenging. Some of these barriers are starting to be broken down by SiteMinder and others which I think can unlock a lot of innovation for the industry. But this is a hard problem and it’s a complicated space with lots of moving pieces so that makes it challenging.”

John Burke, TCV Executive Vice President

SiteMinder’s Exchange marketplace is aimed at allowing other applications to access the firm’s broad user base consisting of more than 30,000 hotels worldwide. Most of those hotels are using SiteMinder’s highly popular channel manager which connects hotel inventory to 3rd party distribution channels as well as other products within the firm’s broader guest acquisition platform such as a rate intelligence tool and an online booking engine. The firm is betting that it can add value for users by allowing them to try more hotel tech applications with ease and in turn create new business opportunities for those suppliers.

We sat down with Burke to discuss his views on hotel tech, the future for platforms like SiteMinder Exchange and highlight the most cutting edge developments happening right now within the hotel space.

How did you get into venture investing?

I’ve been in and around venture since 2011. I started my career with EY in their audit and transaction advisory teams. Getting into venture was a bit of good timing and persistence. The TCV team were looking for an immediate hire and decided to take a chance. I was with TCV from 2011 to 2014 as part of the B2B software team. As I thought about what was next for me, I was drawn to the experiences and mentorship of the TCV Venture Partners (e.g. former senior operating executives such as Erik Blachford). The tech market at that time had been heating up with a few high-profile IPOs. It was my belief that the next wave of great investors was not going to be able to rely on multiple expansion or financial engineering. I believed the best investors over the next 10 years would need to be partners driving actual business growth.

That brought me to SiteMinder down in Sydney, Australia. TCV had just led the Series B investment in the company, and the fundamentals of the business were remarkable. On top of that, they were ramping up for aggressive growth across Europe, SE Asia and were about to launch in the U.S. which I thought would be great experience. I was also excited to work with Mike Ford and the entire SiteMinder team. Mike is a special entrepreneur who is not only very smart and a product visionary, but also authentic and humble. I joined SiteMinder initially in an analytics role and then for the next 3.5 years as CFO. For family reasons, we decided to move back to the U.S. last year, where I reconnected with TCV and rejoined the team. I continue to spend a lot of time in the hospitality and vertical software space and TCV just led an investment in Toast, an exciting next-generation restaurant platform.

Tell us about TCV.

TCV was founded in 1995 as a $100M venture fund and today has raised over $15 billion across 10 funds, focusing exclusively on technology companies. We recently began investing out of TCV X, a $3 billion fund. TCV looks to partner with companies that have potential for a sustained category leadership position and are looking to succeed at an even greater scale. This typically means that a company has been growing for several years — with a history of customer trust and engagement and a business model that is reflective of the value they provide. We are flexible on transaction type with experience in public and private markets and are comfortable in minority or majority positions. Over the past 24 years, we’ve had more than 60 IPOs in our portfolio and have worked with some of the largest franchises in technology including ExactTarget, Facebook, Netflix, GoDaddy and Spotify.

At this point, I’ve talked with many investors in the space which helps me appreciate how the various funds are different. For TCV, I think it’s the depth of industry knowledge and a growth mindset. We have close to 100 team members now and our investment team focuses every day on technology and goes deep in verticals and sub-verticals. When we identify a compelling technology trend, we take the time to thoroughly understand the underlying drivers, business model, and competitive environment. Having a developed perspective means we can have much more meaningful conversations about a company’s business and growth opportunities and are positioned to be a better thought partner for the executive teams as they drive towards expansion and category leadership. We’re not afraid to make bold bets especially when we have conviction on category leadership and to do whatever it takes to help companies reshape industries.

Can you talk about TCV’s view on hotel tech and its SiteMinder investment?

Travel and Hospitality has been a core focus of TCV for well over a decade. In addition to SiteMinder, the active portfolio companies we are working with include Airbnb, TripAdvisor, Sojern, Tour Radar, and Klook. Previously we were investors in Expedia, HomeAway, Orbitz, and Travelport, among others.

For SiteMinder, TCV led the Series B round and we have continued to stay active with the company as the lead director since then. Two of my partners David Yuan (General Partner) and Erik Blachford (Venture Partner) continue to serve on the Board of Directors.

SiteMinder has an incredible history, where is the company today?

SiteMinder is a hotel guest acquisition platform that connects hotels to future guests, so hoteliers can go back to doing what they love. It’s trusted by more than 30,000 hotels of all sizes, across 160 countries and has helped generate more than 87 million reservations worth over US$28 billion in revenue for hotels each year.

SiteMinder is based in Australia, how did you come across the investment?

It was a team effort. Back in 2011 to 2013 we spent a bunch of time mapping out the ecosystem for online travel and hospitality attending industry shows like HITEC and Phocuswright. Ultimately, we identified the channel management sector as promising albeit a lesser known segment in the category. Our view at the time was that online travel was increasingly complicated and in flux with new players vying for hotel distribution. Independent hotels were harder to aggregate but would also allow these same middlemen an ability to offer differentiated supply that was higher margin. Channel management became interesting because it aggregated and provided connectivity to this supply. We thought this was a hard problem particularly to do in a cost-effective way but when executed it could be highly strategic given the long-tail nature of both hotel supply and PMS. From there we focused on the best product and category leader which led us to SiteMinder. One of my colleagues got us an introduction to Mike Ford through an employee. We then got on the 14-hour flight over to Sydney and created a deal.

What’s one piece of advice you have for hotel tech entrepreneurs when raising capital?

Test the investors. Anyone can look at metrics, but make sure you push them on the nuances of your positioning and make sure they understand the depth of your industry and strategic implications of the various alternatives. Mike did this to us in a big way when we pursued SiteMinder and it always stuck with me.

One pitfall I’ve seen is entrepreneurs who get ahead of themselves with regards to the amount of capital raised or valuation and focus on those items vs. choosing the right partner. This can have implications down the road. I would say to raise what you need and what strategically makes sense given your market and opportunity. And focus as much time and energy as you can on the partner. In addition to the strategic perspective which is table stakes, I tend to think entrepreneurs should focus on investors with candor (to drive constructive feedback delivered in the right way) and humility (it’s all about the team and this also makes it more fun).

How do you think the hotel technology space will change over the next 5-years?

It’s a great time to be in hotel technology given how dynamic this market is. I think we are still early in the growth journey for hotel software. In my mind, there is no doubt that software will continue to play a larger and larger role in the next 5 years and continue to reshape the industry and guest and operator experience. We have also been spending a bunch of time on a thesis we are excited about, called “SaaS as a Platform and SaaS as a Network,” which is around the continued extension of the SaaS business model and platform companies leveraging their position in creating marketplaces with employees, suppliers, or customers. I think this trend has many opportunities in travel.

For hotels specifically, I think data, connectivity, and personalization will only increase in importance. Tools like SiteMinder Exchange, which is a data layer connecting PMS with applications and demand channels, can be a big part of this and drive innovation.

I also think there will continue to be more dominant global players with companies like Ctrip continuing global expansion and Google, Facebook/Instagram, and TripAdvisor starting to see momentum on their new models. The lines in the accommodation industry will continue to blur as Airbnb ramps up their investment and focus on hotels as well.

I also feel labor management will matter more, and there will be new innovative ways to tackle this challenge. This is something we’ve seen in the retail vertical which I think will also make its way to the travel industry.

People often say that the hotel industry is a bit slow to adopt technology. Do you agree?

I agree. But I don’t think it’s been driven by the lack of interest or desire. Hoteliers care deeply about guest experiences and the ones that I’ve spent time with often always go above and beyond what’s expected. The reality is that few industries are as fragmented as hospitality particularly at the PMS level. There has always been demand for many of the new applications, but innovation has been stifled by lack of connectivity and the sales model makes the economics challenging. Some of these barriers are starting to be broken down by SiteMinder and others which I think can unlock a lot of innovation for the industry. But this is a hard problem and it’s a complicated space with lots of moving pieces so that makes it challenging.R

If you were leaving venture capital tomorrow and forced to start a hotel technology company — what would it be?

That’s a tough one. Part of working in an operator role at SiteMinder helped me realize how hard it is to be an entrepreneur and scale a company. This only deepened my respect for what they do. I’m a big believer that you need to follow your heart, so I’d want to align it to something I am passionate about. Maybe I’d do something connecting hotels/travel and yoga which is something I’ve come to enjoy. And being a CFO and travelling a lot, I also think the opportunities in corporate travel remain significant.

What is the most interesting or surprising thing that you’ve learned from investing in hotel tech?

Not too much is surprising me at this point. It feels like there is never a dull day in hotel tech! One thing I did notice about some of the larger players in the space is that they serve hospitality, but at their core they are surprisingly not hospitable. One of my partners recently did a podcast with the former CMO at Airbnb and Coca-Cola and he talked about authenticity as an enduring and compounding competitive advantage. I think this is something that will matter more and more. I think it will eventually catch up with those companies who forget that, especially in hospitality tech.

What is the best book you’ve read lately and why?

“The Outsiders” by Will Thorndike. I read it a couple of years ago and it continues to stand out to me. The book profiles eight understated CEOs who took a different approach to corporate management. These “outsider” CEOs often didn’t have the charisma that society has conditioned us to expect and were often in their position for the first time. Humble, unassuming and often frugal, they shied away from advisors and the hottest new management trends, instead focusing on a pragmatic and a disciplined approach to capital allocation which drove extraordinary returns. I found myself getting lost in each of their stories and admiring their independent thinking and patience to wait for the right opportunity. “Shoe Dog” and “Limping on Water” are two others I enjoyed.

What is your favorite podcast?

The top 3 for me right now are Farnam Street, Invest Like the Best, and Acquired. All the them have caused me to think differently and continually expand my curiosity.

What is one thing that most people don’t know about you?

I love yoga and meditation.

For all the startups that might want to pitch in TCV’s office, what can you tell them about your investment criteria?

We recently began investing out of TCV X, a $3 billion fund, so the opportunities we pursue are typically between $30–300M. We tend to be flexible on all other aspects of a transaction type and focus on category leadership potential and growth. I really enjoy spending time with entrepreneurs and would love for folks to reach out even if they are a bit early. Companies can scale quickly so we would love to start a relationship well in advance.


Originally published at https://hoteltechreport.com on May 2, 2019.

The views and opinions expressed in the post above are that of the author and do not necessarily reflect those of TCMI, Inc. or its affiliates (“TCV”). This post is not an offer to sell or the solicitation of an offer to purchase an interest in any private fund managed or sponsored by TCV or any of the securities of any company discussed. This post is intended solely for prospective portfolio companies and their agents regarding TCV’s potential financing capabilities. The TCV portfolio companies identified above, if any, are not necessarily representative of all TCV investments, and no assumption should be made that the investments identified were or will be profitable. For a complete list of TCV investments, please visit www.tcv.com/all-companies/. For additional important disclaimers regarding this document, please see “Informational Purposes Only” in the Terms of Use for TCV’s website, available at http://www.tcv.com/terms-of-use/.


Klook Gears Up for Next Round of Global Expansion and Innovation with US$200 Million Series D Funding

HONG KONGAug. 7, 2018 — Klook, a world-leading full-service in-destination booking platform, today announced it has closed US$200 million in Series D funding, bringing its total financing to date to US$300 million. This makes Klook the most-funded company in the tours and activities sector globally. Investors in this round include Sequoia China, Matrix Partners, Goldman Sachs, Boyu Capital, TCV, an Asia-based sovereign wealth fund, OurCrowd, and some family offices. Sequoia China, Matrix Partners and Goldman Sachs also led the Series C in October 2017. The investment further strengthens Klook’s position as a global player in the travel sector, and accelerates its expansion in the US and Europe, including product growth and technology innovation.

Founded in 2014, Klook is one of the world’s fastest-growing booking platforms, covering attractions, tours, and local experiences as well as local transport and railway services around the globe. It offers travelers more than 50,000 activities and services provided by over 5,000 industry partners in 200+ destinations worldwide. Since closing its US$60 million Series C fund last year, the company has opened offices in London and Amsterdam, and now employs more than 600 people across 16 offices around the world. Its robust growth is driven by the rise of independent travelers and an increasing consumer appreciation for travel experiences. The company is on track to achieve US$1 billion annual bookings in 2018.

Klook will continue to expand its global footprint, with plans to open an office in the US by the end of 2018. The company will also be adding more US and Europe-based curated activities and services onto the platform to fulfill an increasing demand from Asian travelers for diverse and unique in-destination experiences . Simultaneously, Klook will look to bring more US and European travelers to Asia, supporting the company’s long-term vision of serving travelers worldwide to easily discover destinations that are both popular and unique.

Klook has been a pioneer in driving travel innovation, developing travel operator solutions such as the Merchant App and QR-code based e-voucher redemption. Klook’s technology solutions have been widely recognized and adopted by its merchant partners including world-renowned attractions, mass railway transit and other offline service operators. Klook will continue to collaborate with its merchant partners to further provide frictionless, real-time booking experiences for modern travelers.

“Our mission is to empower travelers to build their own unique journey,” said Ethan Lin, CEO and Co-Founder of Klook, “This round of funding marks an important milestone for us. The funding and extensive experience from our new investors will let us to further solidify our merchant portfolio and provide travelers with even more activities and destinations to explore around the world.”

“We are committed to using innovative technologies to help digitize the tours and activities industry,” said Eric Gnock Fah, COO and Co-Founder of Klook. “The new funding will help us deepen our partnership with merchants through more technological solutions that bring new sources of customers and optimize operational efficiencies.”

“By leveraging their strength in digitally transforming their suppliers of tours and activities and tapping into the new generation of mobile-first travelers, Klook is emerging as the clear leader in the online tours and activities sector,” said Neil Shen, Founding and Managing Partner of Sequoia China. “We look forward to seeing Klook help more and more travelers connect to suppliers, and become a key source of inbound demand for Asia and beyond.”

“TCV seeks to invest in companies with exceptional management teams that drive technological innovation,” said David Yuan, General Partner at TCV. “Klook is at the forefront of transforming the travel industry and we’ve been impressed with the team and the company’s growth. We are excited to help them advance their global strategy and expansion.”

About Klook

Founded in 2014, Klook is one of the world’s leading travel activities and services booking platforms. Klook gives travelers a seamless way to discover and book popular attractions, tours, local transportation, best foods and must-eats, and unique experiences around the world on its website and award-winning app (‘Best of 2015’ & ‘Best of 2017’ by Google Play and Apple App Store). With Klook’s innovative technologies, travelers can book after arriving in their destinations and redeem the services by using QR codes or e-vouchers. Each day, Klook empowers countless travelers to indulge in their wanderlust and spontaneity through over 50,000 offerings in more than 200 destinations.

With a team of over 600 across 16 offices worldwide, Klook’s services are available in eight languages and 36 currencies. It has raised a total of US$300 million investment from world-renowned investors including Sequoia Capital, Matrix Partners, Goldman Sachs, Boyu Capital, and TCV. Get inspired by Klook at www.klook.com or the company blog. 

About TCV

Founded in 1995, TCV provides capital to growth-stage private and public companies in the technology industry. Since inception, TCV has invested over $10 billion in leading technology companies and has helped guide CEOs through more than 115 IPOs and strategic acquisitions. TCV’s investments include Airbnb, Altiris, AxiomSL, Dollar Shave Club, EmbanetCompass, EtQ, ExactTarget, Expedia, Facebook, Fandango, GoDaddy, HomeAway, LinkedIn, Netflix, OSIsoft, Rent the Runway, Sitecore, SiteMinder, Splunk, Spotify, Varsity Tutors, and Zillow. TCV is headquartered in Menlo Park, California, with offices in New York and London. For more information about TCV, including a complete list of TCV investments, visit https://www.tcv.com/.

To download photos and other press materials: https://goo.gl/fN1Bz6

To learn more about our investors, please visit:               

Sequoia Chinawww.sequoiacap.com/china/en/  

Matrix Partners: www.matrixpartners.com.cn  

Goldman Sachs: www.goldmansachs.com  

Boyu Capital: http://www.boyucapital.com/

TCV: https://www.tcv.com/ 

OurCrowd: www.ourcrowd.com/

For media enquiries, please contact: 

press@klook.com

SOURCE Klook

Related Links

http://www.klook.com