TripActions raise of $275M has Fintech to Thank: From $0 in revenue up to $7.25B value
TripActions was best known for combining many aspects of corporate travel bookings, hotels, and rental cars with expense tracking, prior to the COVID-19 pandemic.
Palo Alto's TripActions was one of the startups that was severely affected by the COVID-19 pandemic. According to Ariel Cohen, CEO and co-founder, the global crisis led to its revenue falling to $0. The company laid off almost 300 employees due to a slowdown in business in response to the pandemic.
TripActions decided to speed up the timeline for TripActions Liquid (its fintech expense product), which was launched just a month prior to the pandemic. The pandemic resulted in increased digitization, with employees making spend decisions outside of the office, and more merchants accepting digital payments.
TechCrunch's Cohen said that it was clear to us quickly that we had to be able to satisfy the demands of our customers in order to manage travel expenses, as well as employee spending. We realized that employees were scattered and would be able to expensing virtual software and home office equipment instead of travel. We expanded the range of expenses that employees could submit.
This pivot proved to be a wise move by the company. Today, it announced that it raised $275 million in Series F growth funding rounds at a valuation of $7.25 billion. Greenoaks was the lead of the financing. This included strong participation by Elad Gil, Base Partners, and all other key financial investors. The company today announced that it has raised $275 million in a Series F growth funding round at a $7.25 billion valuation.
TripActions secured a $155million Series E investment in 2015 at a value of almost $5 billion. The company raised $1.3 billion in total since 2015, approximately $780 million of which were secured during the pandemic.
This latest funding is noteworthy for several reasons. It signals a shift in TripActions' focus from a primarily corporate travel startup into a spend management business. It is therefore in the same group as Ramp and Brex, which are fast-growing fintechs. Cohen believes that the main difference is that TripActions focuses more on enterprise companies, while TripActions is focused more on travel.
TripActions Liquid will replace traditional spend management systems, just as TripActions continues its disruption in the corporate travel market. There is no other company that can provide a single, unified T&E [Travel & Expense] solution on a global scale for enterprises.
TripActions currently has over 5,000 customers including Crate & Barrel and Wayfair, Pinterest. Lyft. Zoom. Toast. Amplitude. Ancestry. Box. Axios. SXSW. Glassdoor. SurveyMonkey. Lennar. Qualcomm.
Cohen did not reveal exact revenue numbers, but he stated that TripActions had exceeded pre-pandemic levels of booking volume as well as revenue. Cohen said that the startup has nearly doubled its travel budget, while its expense budget under management grew 1,400% in the same time period. TripActions Liquid's transaction volume has increased by more than 500% and active users have grown by nearly 400% in the last six months. Heineken and Snowflake were recent enterprise customers. Thomson Reuters, Adobe, and Thomson Reuters are also winners.
TripActions currently has 1,500 employees, compared to 800 when it laid off in March 2020.
The company intends to use the new capital to increase TripActions Liquid's fintech payments and expense management solutions, and to expand globally.
It plans to make a larger investment in Reed & Mackay. This agency, which it recently purchased, provides high-end support (including VIP service and M&E for TripActions). TripActions plans to expand its European business, which now accounts for 30% of its total revenue. The company plans to increase its workforce by more than 150 in the United Kingdom, Israel, and other European countries this fiscal year.
The company plans to continue investing in core travel, with the goal to become an indispensable tool for companies in the future. Cohen claims that Lemonade has increased its booking volume by nearly 10x this fiscal year.
In a written statement, Neil Mehta (founder and managing partner at Greenoaks) stated that there is a sea change in corporate travel and spend as companies seek powerful and efficient travel solutions for the post-pandemic era. TripActions is quickly gaining popularity among the largest companies in the world, and is well-positioned to be the leader as global travel recovers.
Elad Gil, an investor who just raised his own fund, described TripActions in a large TAM as an N-of-1 business.
He said that the company had performed well and will continue to do so.
You are starting to notice corporate travel taking a backseat, and TripActions has the right tools to capitalize on this opportunity, Gil wrote via email. Liquid and other add-on businesses are growing well.
He believes that the startup has many great features to enhance the travel experience, including smart features about COVID-related trip plans.
