Snaptrip snaps up a fresh round of funding for its growing online travel niche
One and a half year old Snaptrip has just secured another £1.5m investment and prospects look promising, writes Sally White
Maybe the financial world is not in as dire a state as the news would have us believe. While the behemoths of commerce do seem to be struggling, down at the other, start-up, end of the scale all seems well enough. A quick flick through Crunchbase shows that 2016’s international daily financing log is already accumulating nicely. And, a small but positive bit of evidence, in the UK, last-minute self-catering holiday cottage platform Snaptrip has had no problem securing another £1.5m in a fresh funding round.
For would-be tech entrepreneurs there had been scary reports early in 2016. Or, at least it looked worrying when Bloomberg reported that venture capital fund-raising had hit a speed bump. This was about a US National Venture Capital Association (NVCA) report of a fall in venture capital raised in 2015, from $31.1bn to $28.2bn. And the number of new funds launched dropped, by 13%.
Of course, with numbers so large the fall may scarcely matter - but the fear was that this was a straw in the wind that could have international impact on tech funding. Fortunately, that story has been overtaken by news for the better, as far as new entrepreneurs are concerned, anyway.
Then came another report, this time from Washington-based financial service group MoneyTree (using data from Thomson Reuters and the NVCA), which found that corporate venture capitalists provided $7.6bn to start-ups in the US in 2015. That is the highest annual figure since 2000 when MoneyTree first started releasing these reports. Plus, there was, it said, a 37% increase in the volume of funds raised and a 21% increase in the number of deals closed.
So, perhaps it looks as though prospects for Snaptrip et al in 2016 may not be so bad after all.
The Snaptrip story is encouraging. While it may seem amazing that it is still possible to find new online travel niches, especially in Europe, Snaptrip seems to have done it. Its classic formula is to remove search time and hassle and deliver real-time, accurate info. Plus, it offers a discounted rate on many of its listed cottages.
In other words, it offers what Last Minute or Hotel Tonight do for hotels. May you have to be, like Snaptrip founder Matt Fox, a father of a young family to spot the opportunity in self-catering holiday cottages!
Now just over a year-and-a-half old, Snaptrip says it booked 30,000 holidays in its UK cottages in 2015. Of these, it adds, most had a good discount - its offer is up to 50% savings. After linking up with partners such as Cottages4U, Marsdens, Blue Chip Holidays and a large number of management agencies, it claims to have the UK’s largest website of its kind. It has expanded fast and now has over 40,000 cottages.
There seems plenty of scope for further development of the business. This time the new money is go to marketing, product development and more people. In its sights is expansion into Europe and the US.
It has also linked-up with its cottage-owners to offer a membership scheme - the deal is an exclusive price in return for an email address. Snaptrip has found that members of the scheme are five times more likely to make a booking than first-time site users.
Even three years ago when Snaptrip had no name and was just founder Matt Fox, the story was attractive enough to win its first backing from Forward Partners. This is a London-based group which invests in start-ups, mainly in ecommerce. (Other clients include licensed taxi app Hailo.)
This was Matt Fox’s first entrepreneurial move. Previously he’d worked for a holiday rental business, where he’d seen how much accommodation went untaken. That gave him the idea of going the discount route for last-minute deals. As it turned out, he was right in thinking that rather than be left with an empty-cottage, owners would be happy to offer a deal to get a booking.
As Matt Fox tells his story, Forward Partners launched him with office space, backing to build his product and even an introduction to his co-founder. (Ex-HomeAway Dan Harrison, who brought the necessary technical expertise to the company.)
Forward Partners put in a total of £250,000 in three slugs. At the next funding the investing group were again Forward Partners and also 14 angel investors, including chairman of Just Giving Jonathan McKay. That round brought in £450,000.
Snaptrip’s latest funding round, echoing the MoneyTree findings, certainly found no shortage of venture capitalists wanting to do deals even in the UK. It brought newcomers to the share register in the form of London-based Bestport Ventures and the London Co-investment Fund, the fund set up with £25 million from the Mayor of London and other official sources to back tech start-ups. Not quite matching that $7.6bn, but still very useful seed corn.