What happened: Two travel companies caught my eye this week. Canadian Hopper aims to go public at a USD10 billion valuation at an undefined point in the near future (Bloomberg), and Spanish TravelPerk raised USD200 million and acquired Swiss corporate expense management provider Yokoy (The Paypers).
My comment: Travel has been a hot area for fintech and embedded finance, but these two companies are new to me. At least in the context of Hopper, that’s on me. In 2021, their metamorphosis from travel to fintech has been covered extensively (Skift). Previously, the company was known for its flight price comparison engine and recommended to consumers when it was the right time to purchase that flight ticket. However, with the shift towards fintech, the company added various insurance products, such as price and trip protection offerings. These offerings have increased the average transaction size by USD 40 and, on average, a 55% greater margin. So it sounds like Shopify might soon not be Canada's only major public embedded finance company.
On the other hand, Spanish TravelPerk is a corporate travel solution provider whose primary goal is to simplify and streamline the business travel process. The core product is an all-in-one booking platform, but TravelPerk has launched ancillary services in the past. The acquisition of Yoko is likely the next big step in this regard. TravelPerk describes this well in its LinkedIn post, which explains its goal of combining the worlds of travel booking and expense management. From what I know, TravelPerk already had a strong offering in travel-related expense management, so with the acquisition of Yokoy, I guess TravelPerl also wants to cover non-travel-related expense management items. Since TravelPerk already has a strong connection with many of its corporate customers, it seems logical to aim for a broader usage. But this is sad news for all the banking-as-a-service providers out there hoping to become the provider of choice for a TravelPerk card offering.
