AI-driven corporate travel management platform TripActions is based in Palo Alto, California, but it was first established in 2015 in Israel by founders Ariel Cohen and Ilan Twig. The tech startup provides its enterprise clients with real-time data, automated reporting, and insights into their travel patterns and expenses. But, in March 2020, the COVID-19 pandemic zeroed its income and forced it to lay off 300 employees as travel ground to an abrupt halt.
Just short of a year later, in January 2021, TripActions brought in a $155 million Series E funding round. And now, a second round has generated $275 million in Series F growth funding, bringing its total funding since its inception to $1.3 billion. Bookings and revenue now exceed pre-pandemic levels, and the total travel budget under management has doubled compared to February 2020. Its 5,000 plus customers include such well-known brands as Crate & Barrel, Lyft, Zoom, and SurveyMonkey.
So, just how has this young organization managed to rise from the ashes of the trampled travel industry?
An Agile Response to New Client Needs
Cohen, CEO of TripActions, attributes part of the success to a new fintech expense product, TripActions Liquid. Launched just a month before the pandemic struck, it pivoted relatively quickly from handling travel expenses to managing all employee spending of company money.
Cohen explains that while they realized corporate travel had ceased, other employee expenditures, mostly related to working from home, were ramping up. Plus, more providers were accepting digital payments. As a result, Liquid was ideally positioned to manage spending decisions made outside the office, such as for home office equipment and software. While Liquid was launched as a payment solution in February 2020, these all-important expense management tools were added by October 2020.
TripActions’ agile response to new client needs protected its revenue streams, but it has also allowed the organization to transform into a broader spend management company rather than an almost-exclusive corporate travel solution. Funders now view it alongside fintech companies like Brex and Ramp, who Cohen says are oriented more toward small and midsized enterprises. Meanwhile, TripActions’ roots in travel have secured it many enterprise clients.
Part of the company’s recovery is undoubtedly due to acquiring new enterprise clients like Thomson Reuters, Heineken, and Adobe with the launch of TripActions Enterprise Edition in September 2020. In Cohen’s opinion, no other spend management solution offers an equivalent global, unified, and enterprise-focused travel and expense (T&E) solution. From February 2020 to the end of July 2021, TripActions’ expense budget under management grew by 1,400 percent.
Is an IPO the Next Step for TripActions?
TripActions’ latest round of funding, led by Greenoaks Capital, values the startup at $7.25 billion post-funding. All key existing financial investors, including Elad Gil and Base Partners, also participated. And while an IPO would be a natural next funding step, it’s not planned anytime soon, according to TripActions Liquid’s general manager Michael Sindicich.
With its significant cash and steady revenue stream, TripActions will continue to respond to enterprises wishing to switch from legacy travel agencies and reservation systems to innovative solutions adapted to how the world will operate moving forward. Although Liquid was initially set up as a separate team and accounts for similar transaction volumes as core travel, Sindicich says almost all new clients are using TripActions’ full suite of solutions for corporate travel, expense, spend, and payment management. It has become clear that the two platforms function optimally together, not least because 70 percent of expenditures happen while employees are on trips.
In addition to maintaining development on these products, TripActions will speed up development on a personal travel booking it launched in October 2020. The solution, called Lemonade, provides discounted rates, travel information, and support for personal travel to client employees.
TripActions will also be on the lookout for further complementary acquisitions like the Reed & Mackay deal of May 2021. Based in the UK, Reed & Mackay is a high-end travel, meetings, and events business with a global reach. Under the TripActions umbrella, it retains its premium brand, staff, and clients. Together, the group will partner to deliver an unmatched corporate travel and spend management experience. Further leveraging the acquisition, TripActions’ Team Travel product, which facilitates get-togethers of distributed employees via a self-service interface, now supports meetings and events.
And finally, the funding will be used to increase staff globally and expand initiatives in the Middle East, Africa, and Europe—the latter now making up almost one-third of the group’s business. TripActions management is convinced that global enterprise T&E is ripe for a tech makeover, and investors and clients seem to agree.