Aussie travel startup Travello has secured $6.5 million in Series A funding, following a shift in focus that has positioned the business for strong post-pandemic growth — even if we don’t see international borders open anytime soon.
Despite travel being out of the question for the best part of a year, Travello founders Ryan Hanly and Mark Cantoni managed to grow their online community and double down on their online booking platform for experiences.
They’re now focusing on growth in Australia and overseas, bringing on high-profile industry investors in an oversubscribed funding round. Those investors include Flight Centre co-founder Jim Goldburg, former Tourism Australia chief Andrew McEvoy and former Velocity boss Phil Gunter.
Founded in 2015, Travello is a social networking platform designed to connect like-minded travellers, while serving up recommendation for things to do and see near them.
In 2018, the startup raised $5 million in funding, and was recording steady growth. However, over the past 15 months or so — as with every other company in the travel sector — things haven’t been smooth sailing.
When the COVID-19 pandemic hit, “we essentially saw our revenue drop down to zero,” Hanly tells SmartCompany.
The business was forced to cut its marketing spend, lay off staff members and reduce remaining team members to a four-day week. However, the community side of things was growing, with engagement metrics tracking up too.
Passion for travel doesn’t disappear overnight, Hanly notes. So, early on in the pandemic the team started to think about what travel would look like post-COVID, and where the opportunities might be.
Travello has always been a digital-first business. The founders saw other sectors shifting to online operations, and realised that when travel was back on the cards again, they would be “perfectly positioned”.
At the same time, the prolonged border closure has meant many traditional travel agencies have had to close their doors for good.
“That is really unfortunate for the industry,” Hanly says.
“But it really presents a Greenfield opportunity for a company like Travello.”
In order to maintain growth and momentum during a time when they literally couldn’t make sales, the team focused on engaging with and growing their community of followers — all with no marketing budget to speak of.
“We got right back to our startup foundations,” Hanly recalls.
They doubled down on their socials, posting memes and other travel related content. And it resonated: Travello’s social reach grew from about 3 million people per month to about 120 million, all over the world, Hanly claims.
That led to thousands of new followers and app downloads.
“We kind of hacked our way to growth from the consumer side.”
At the same time, the startup was able to fast-track its growth in terms of service offering, with the acquisition of tour and activity booking site Backpacker Deals in October last year.
Revenue began picking up again in September 2020, Hanly says, and since November, it’s been growing by about 40%, month-on-month. Travello is now “pretty close” to bringing in its pre-COVID figures.
“If we can get through this — which we’ve managed to do — we should be able to manage the good times a whole lot better,” the founder says.
Road to recovery
Travello is investing in rebuilding the team and the funding is intended to fuel some serious growth in market share in Australia and New Zealand.
There are plans to expand into the US and European markets, too.
Focusing on tours and activities means the startup isn’t reliant on international borders opening. Instead, the focus is on reaching domestic travellers in their own regions.
Of course, the raise announcement comes in the same week as Victoria’s latest snap lockdown, which has seen thousands of businesses — including tourism operators — forced to shut their doors again.
While it’s clear the COVID-19 crisis is far from over, Hanly says the industry is “crying out for” some stability over the next 12 months.
Even is international borders are going to remain closed, constant changes to state borders make it difficult for would-be travellers to make plans — and for the businesses that would serve them to make theirs.
“Closing down one state impacts all the others,” Hanly notes.
“We see real shifts in sales levels as soon as things like this happen.”