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Unquote
  • Investments

Deal in Focus: Disruptive travel firms are hot Tiqets for VCs

The Sagrada Familia in Barcelona
Tiqets offers users a mobile ticketing service for tourist destinations like the Sagrada Familia in Barcelona
  • Alice Murray
  • Alice Murray
  • 11 March 2016
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The Capital Mills-led $4m series-A for Dutch mobile ticketing company Tiqets highlights the popularity of the segment with VCs. Alice Murray explores what it takes to survive in this competitive market

The investment, which follows on from Amsterdam-based Tiqets' $450,000 seed funding by Investion in December 2013 and its $1m capital injection in February 2015, saw Capital Mills lead a $4m series-A round for the company.

While Capital Mills has a preference for IP-led companies, the Tiqets deal comes as venture capitalists scramble to invest in technology-led disruptive travel companies. Indeed, in Europe alone, since the beginning of 2012, unquote" data has recorded 109 investment rounds in tech-enabled travel-related companies.

However, with so many of these companies springing up, it's of little surprise that only a few are finding success. One notable VC-backed travel startup that failed to fly was Sweden-based TripBird. After changing focus from social travel to hotels in 2012, the company decided one year later to stop developing its service.

Standing out from the crowd
For Erwin van der Veen, partner at Capital Mills, Tiqets possesses several features that should offer a level of differentiation as well as protection. First, the business is easy to understand. "It is simply trying to make things easier for tourists by letting them skip lines, thereby having more time to enjoy their trip," says van der Veen.

Tiqets offers users a mobile ticketing service for tourist destinations – currently available in Paris, Rome, London and Amsterdam – often with discounts and an option to skip queues for popular attractions, like the Sagrada Familia in Barcelona.

Second, the company's sole focus on tourists sets it apart from the plethora of startups focused on the hotel and accommodation markets.

Tiqets runs a very IP-driven system and this provides it with protection against competitors" – Erwin van der Veen, Capital Mills

Third, and arguably most importantly, Tiqets' IP-led approach gives it an edge in this sector. "Tiqets runs a very IP-driven system and this provides it with protection against competitors," says van der Veen. And it is this focus on IP that attracted Capital Mills to the company in the first place. "We were introduced to the company through another VC in the Netherlands. As we are interested in IP it made sense for us to be introduced to the company."

City breaks
As the main growth strategy is simply to launch the service in more cities (targeting 14 more over the next six to eight months), Tiqets' IP-driven approach makes this ambitious plan achievable, according to van der Veen. "The management team has a clear plan of how to go about launching in new cities, based on experience. If they enter a new city they know what steps to take and when they reach a certain point, it becomes an automatic evolution – they just need to flick the necessary switches."

However, Tiqets' plan for scaling is not simply a case of applying its offering to each city; rather, a tailored method is used. "For each city Tiqets looks at, they look at the number of tourist visits, where tourists are coming from, and assesses how sensible the service is. For example, in London, a lot of museums are free to enter – so there needs to be a different approach for each city."

While there has been a tidal wave of startups hoping to disrupt the travel sector, the ones gaining serious traction with travellers have also gained increasing attention from VCs. Indeed, SkyScanner most recently raised £128m from five new investors, while Citymapper received €50m from Index and Benchmark. As these travel companies grow ever larger, they present a compelling exit opportunity for the likes of Tiqets.

Further reading

  • Expansion
Tiqets raises $4m series-A
  • 09 Mar 2016
  • Buyouts
Deal in Focus: Endless acquires struggling Brabant Alucast
  • 18 Feb 2016
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