YouTrip Co-founder and CEO Caecilia Chu speaks to Jumpstart about the company’s pandemic pivot strategy Established in 2018 as a multi-currency mobile wallet for travelers, travel fintech company YouTrip entered pandemic-paralyzed 2020 on the back of 10x growth in 2019. Based in Singapore, Hong [...]
Interviewed by Kaden Ng
Travel tech is a very competitive industry. Yet, Hong Kong-based startup Klook outshines others and became Asia’s leading platform for booking travel activities. Founded in September 2014, Klook has grown from a team of 30 to 200 with 8 offices across Asia. Last year, they recorded up to 5 million bookings on site.
A major drive for Klook’s success is its ability to draw VCs and funding. Within a year since inception, Klook raised US$1.5 million seed capital from angel investor Wu Xiaoguang, a former executive of Tencent. Last October, Klook further secured US$5 million Series A funding led by Matrix Partners. In March this year, Klook closed a $30 million Series B funding round led by Sequoia China.
With the latest round of funding, Klook is set to go beyond Asia and disrupt the global travel industry. In this issue, we have the pleasure to sit down with Eric Gnock Fah, the co-founder and COO of Klook. We talked about the current travel tech landscape, insider information to getting funding, the challenges of scaling a business, and the future of Klook.
1. First of all, congratulations on your latest round of funding! Travel tech is an extremely competitive market. What makes you stand out from other competitors? What are the things you feel you did right?
We have done much research and analysis to identify that the in-destination services segment, spanning from attractions, local tours, to transfers and WiFi, is ripe for disruption along with favorable market trends. Flights and accommodation are getting cheaper, hence propelling fast growth in travel coupled with increasing interests in experiential travel.
From day one, we decided to painstakingly re-invent in-destination services supply chain with technology in order to improve our suppliers’ efficiency. At the same time, we also committed to facilitating the most seamless booking flow. Simply building a website to list products would relied heavily on manual process that would put user experience at a detriment.
2. What do you think of the current travel tech landscape? Where is it heading?
As mentioned, travel tech is highly competitive whereby scale is a major barrier to entry. If you look at the global landscape, Priceline and Expedia own the entire space, with the exception of fast-rising Airbnb. Meanwhile in China, Ctrip – a partly Priceline-owned booking platform – is close to monopolizing the online travel sector. Now, even in the hottest segment of in-destination services, the landscape is also forming with the likes of Klook growing with unparalleled scale in the region. The next breakthrough in travel tech is likely to be more in the field of tools and function, such as itinerary planning and Chatbots, rather than simply online booking.
3. Klook is obviously very successful in drawing investors. Do you have any tips you can share with other local entrepreneurs on how to secure funding?
It really depends on the stage of the venture.
At the early stage (i.e. seed or series A), it’s really about the team: How committed are the founders? We invested our own money and didn’t take any salary until Series A, and even now, still at a very minimum level – we are all in. Also, the team have to really understand the ins and outs of the sector they chose and how they plan to scale it into a billion dollar business.
At mid stage (i.e. Series B), it’s still about the team, but now, it is more about the broader management team that the founders built, as well as the growth track record.
4. What are the elements of a killer pitch?
Show that the founders are committed. Ideas can always change and business often pivots. What doesn’t change is the founders’ commitment to building something big.
5. You raised US$5 million Series A funding last year. How did you use the funding to bring Klook to where it is now? What are the main challenges in scaling the business?
We invested mainly in hiring – from tech team to marketing. The main challenge remains in hiring the right talent to scale a pan-Asia business, as previously there was practically no company that has successfully scaled across Asia from China, North Asia, to Southeast Asia.
6. Now that a new round of funding is out of the way, tell us how this round of funding will get your company to the next level and what’s next for Klook?
We will continue to invest in human capital as well as in expanding our destinations coverage globally. At the same time, users will see a wider array of in-destination services. We started off with tours and activities, and recently expanded to cover airport transfers, inter-city rail to sim cards and WiFi routers. You will soon find more dining options available.
7. Where do you see Klook in 5 years?
Our goal is to go IPO before 2020.
8. If you could give one piece of advice to aspiring entrepreneurs in Hong Kong what would that be?
Think global from day one and make sure your business model can scale across different countries.