Startup Headout was not the only industry that was hardest affected by the pandemic. The app was a marketplace that allowed tourists to make same-day reservations for events, tours, and activities. It launched in 2015 and has since grown rapidly around the globe. COVID-19 was then launched.
Headout claims that business is recovering thanks to domestic travel rebound. Headout says it has increased 800% in the past year. Glade Brook Capital, who has previously invested in markets like Uber, Meituan and Instacart, announced that the company has raised $12 Million. Returned investors Version One Ventures and Nexus Venture Partners participated in the round, as did FJ Labs and 500 Startups. Haystack, Ludlow Ventures and Ludlow Ventures. New investors Espresso Capital were also included in the round, as was Practical VC.
Headout claims it has reached profitable EBITDA (earnings prior to interest, taxes and depreciation) in July. This new funding will be used for product development, expansion into 300 cities and the product, business and operations teams. Headout intends to hire more than 150 people around the globe and is looking for opportunities to acquire travel and entertainment startups.
This is a huge turnaround since the outbreak of the pandemic. Varun Khona, the co-founder and chief executive officers of TechCrunch, stated in an email that the pandemic was as devastating as you would imagine. In a matter of weeks, our business went from being worth $250M+ to a negligible size.
Headout discovered two major tailwinds as travel slowly resumes. The second is travel experience providers that are digitizing their services for the first-time. In the third quarter of 2020, the company started focusing on domestic travel. It is seeing the greatest demand in countries with high vaccination rates like the United States, United Kingdom, European Union, and United Arab Emirates.
We prioritized onboarding local, niche and diverse experiences to win this market. Khona said that we standardized these pop and room experience providers and upgraded their services. We also brought them online. We also worked hard to make Headout available in local languages. Not just machine translation, but actually creating compelling content that inspires.
Khona was asked about Headout's differentiation from other online booking marketplaces. She said that in 2018, Headout evolved from being a traditional listing-oriented marketplace like Booking.com to become a managed marketplace. This is done by standardizing, upgrading, and branding experiences to ensure consistency quality. This resulted in higher conversion rates which allowed us to provide more sales to our partner and thus command a higher take-rate, leading to profitable unit economics.
