Interview
The Secret to TripActions' Success: Clients' Low Expectations, Says Co-Founder
TripActions' recent $250 million funding round saw it jump from a $1.1 billion valuation to $4 billion in less than a year
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If you ask Ilan Twig, co-founder and CTO of corporate travel startup TripActions Inc., the secret to his company's meteoric success is the fact that customers come with very low expectations. "People who use our platform are not expecting a good solution because they are accustomed to terrible ones," he told Calcalist in an interview last week. "So, when something goes wrong, and we provide a solution, they cannot believe it is happening."
TripActions founders Ariel Cohen (left) and Ilan Twig. Photo: PR Employees booking trips using TripActions can book a flight, a car, and a hotel room within minutes, co-founder Ariel Cohen told Calcalist. "People like the speed, but our true value is revealed when there is a problem—if the flight is canceled or a connection is missed. Instead of waiting for the customer to call us to start finding a solution, we contact them," he said. Meanwhile, he added, the employer is kept in the loop, having full visibility on where the employee is at every stage.
"In recent months we have undergone a big change in the kind of companies using our service," Cohen said. "In the past, these were companies that spend up to $20 million a year on travel. Today, we work with companies like the We Company (previously known as WeWork) and Lyft, huge companies with offices all over the world. We manage their travel budgets, and we are looking to onboard new clients. One of the goals of this recent round is to offer service to multinationals all over the world."
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TripActions offers a business travel management service designed to save companies time and money on employees' work-related trips. TripActions wants to disrupt the business travel market—which the company estimates at $1.5 trillion per year—by replacing the antiquated system of manual bookings with an automated system based on artificial intelligence algorithms.
TripActions founders Ariel Cohen (left) and Ilan Twig. Photo: PR "If you have a delayed flight and you are about to miss a connection, it is very stressful," Twig said. "Our technology provides a service that instantly reduces the anxiety factor," he said. "Those who use our service do not go back—it is like moving from black and white to color."
Last week, TripActions announced it completed a $250 million funding round, raised according to a company valuation of $4 billion. In November 2018, TripActions completed a $154 million round according to a company valuation of $1.1 billion. To date, the Palo Alto-based company, founded in 2015 by Israeli-expats Twig and Cohen, has raised more than $480 million. With its recent funding round, TripActions is now the youngest, fastest-growing company on the list of unicorns (companies valued at over $1 billion).
"Our sales in 2018 were five times those of 2014," Cohen said. According to him, TripActions has some 2,000 business clients today and accepts new clients at an average pace of 200 per year. One year ago the company employed 100 people. Today, he said, TripActions employs 750 people.
TripActions is not Cohen and Twig's first startup together, nor their first financial success. In 2013, having raised $1.5 million in equity, the duo sold their team collaboration startup StreamOnce Inc. to Jive Software for $15 million. StreamOnce's principal backers, Lightspeed Management Company LLC and Zeev Ventures LLC, went on to back Twig and Cohen's new adventure. Andreessen Horowitz is another backer, as is Dov Frances’ Group 11.
"Our investors see the whole picture," Twig said when asked about raising their recent round less than a year after their previous $154 million round. "Our business is growing at a mad pace, and we have demonstrated very high-performance capabilities."
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One of the things on TripAction's agenda this year is entering the Israeli market. Last year, when the company was raising its previous round, this was not a part of the plan. But the frequent trips Israel-based companies’ executives take mean the local market is very attractive—despite its small size. Cohen said that the company intends to create "a serious presence" in Israel, establishing an office to join the ones already operating in the U.S., Australia, London, and Amsterdam.
