A new venture aims to give SMEs more clout by combining their spend
Small and medium enterprises (SMEs) do not have the spending power to negotiate with travel suppliers like large companies do. TravelBank’s founders realised this when a former venture was acquired by Microsoft and they were introduced to the world of business travel.
Their idea for a platform that combined SME travel volume was propelled forward when Concur acquired SAP, and so TravelBank was born. We spoke to co-founder and CEO Duke Chung to find out more.
When did you launch?
How many people work for the company?
Sum up what your company/product does in one sentence
TravelBank is an all-in-one, modern expense and travel booking app that helps businesses save time and money, and rewards employees when they make better spending decisions.
Why is it unique?
The SME market is fragmented – not many do [managed] bookings but most do expense. We wanted to combine the two.
We started on the expense side and wanted to make this very modern and mobile by enabling users to capture expenses or scan via their camera and create a report. Then in May 2017 the booking product was launched to combine T&E.
What problem does it solve?
Firstly, at Microsoft we realised a huge opportunity to reinvent the T&E space in enterprise. We wanted to go after the next-generation travellers as their behaviour is so different to road warriors.
Secondly, small businesses are hurt as they are paying retail for business travel. Their spend isn’t big enough to negotiate, but if TravelBank can accrue the volume we can negotiate on their behalf as one group and the inventory comes through us. It’s using GDS inventory but we’ve done direct deals with 200 airlines so we can educate airlines on that market and get exposure to the group; it’s a huge win for us. We share the commission too so the SMEs get a rebate.
What markets is it available in?
We’ve concentrated on the US so far. The app can capture 150 currencies and convert to US dollars for expense reports.
Which companies are using it already?
Seven hundred companies have downloaded the free app and there are 3,000 users. 70-80% of those signed up are in sales, consulting or marketing teams and their company doesn’t have an expense system.
What do travel managers like about it?
SMEs can benefit from discounts like larger companies and the more bookings made via the platform, the more money they receive in rebate.
We’ve thought about expenses from the pre-trip perspective so it’s a way of enforcing policy in a travel and expense platform, where we use the programme to construct a budget. This way companies can predict the trip cost before the traveller goes. The traveller searches market rate data for flights, hotels and amenities like food and parking (benchmarked by city) and then sends that budget to managers for approval. Similarly, we can build per diems into the tool.
Why do travellers like it?
When using budgets it gives travellers flexibility so they could take a first class flight but stay with a friend [to balance costs] or take an Uber instead of car rental.
There is TravelBank Choice which is like Amazon Best and personalises what is best for the traveller whether it’s based on fastest, budget, loyalty scheme, plane size etc. With each booking the platform learns from what they purchased and can predict what’s next eg like Amazon somehow knows what you’ll buy.
Also, if the traveller can beat the budget they can receive rewards; companies can offer to give half of what was saved to the traveller so they can earn money. Younger travellers have smaller salaries so the additional money is meaningful and can supplement their salary.
The tool also tells the traveller which employees have booked on a certain flight and they could choose to sit with them.
What are your growth plans?
We are currently in a strong growth period – both on the team and product side. We recently moved to a new office in the SOMA district of San Francisco and plan to double our size from 30 to 60 employees.
On the product side we’re focused on improving the business travel and expense experience for end users and companies. In the past quarter we launched our bookings product which allows users to book flights via the app and in the past month we announced our commission sharing programme for companies and auto rewards for employees.