These have been difficult for several years Ohio, the Berlin-based travel search and booking platform, which saw 98% of its revenue evaporate overnight when COVID-19 hit Europe in the spring of 2020. But the company continued to ship and found some light at the end. of the tunnel: Today it reports revenue that has recovered to more than twice the levels before the pandemic. He also announced the completion of the E series for $ 80 million.
The round includes support from some new investors, including Lazard Asset Management and Stack Capital Group. Existing investors who are regaining support for nearly a decade of business include NEA, Temasek and funds managed by Goldman Sachs Asset Management, among others.
This is Omio’s first funding from a A $ 100 million convertible banknote that he took a little less than two years ago to experience it during the first waves of the coronavirus crisis. In total, it has raised about $ 480 million since its founding in 2013.
The new funding will be aimed at reviving global enlargement activities, which must have receded slightly into the background during the pandemic – including through mergers and acquisitions; and by doing more with its transport data and inventory by scaling up its partnerships (existing collaborations include links with Kayak, Huawei and LNER (North East London Railways), among others.) Investments are also planned to hire and develop products.
“When COVID-19 hit, we paused this global expansion strategy, so now it’s back on track,” founder and CEO Naren Shaam told TechCrunch. “But with a slightly different twist – and the twist is basically that we are very focused on our knowledge and our traits that we acquired during COVID-19. So we will do it in a much more disciplined way. “
This means that the preference will usually be “build against buy”, he says – but with the possibility of strategic acquisitions for selective technologies and / or inventory to support further global scaling.
At the moment, Europe remains Omio’s largest market – but Shaam says demand in the US where Omio launched just before the pandemichas “bounced back”, so he again sounds optimistic about the prospects for growth over the lake.
The startup for the trip did not reveal an assessment of its business at the last promotion, but this is essentially a key moment for Shaam, who rejects the issue with a laugh. “We never comment on the assessment,” he said, adding, “Let’s just say I’m building a business in the long run, so I’ve never focused on that.” (Although it sounds fair to say that the increase in August 2020 is a downgrade and round E is up again.)
Having long-term thinking in the face of such a shock crisis for the primary industry to serve your business is probably essential to get Omio through the worst moments of the last two years – as well as set it up for any problems that they can lie or lurk ahead. More pandemic tunnels remain possible, of course, given that the COVID-19 virus continues to develop.
One impact of the crisis has been forcing start-ups in the affected industries to focus strictly on managing and cutting costs. Omio is no exception – that’s why a slightly more modest increase is now all it takes to stay on track, according to Shaam. (We were also told that the Serie E promotion should last two to three years.)
“COVID-19 has hit us hard. We had to focus on costs. And we really supported a very weak business coming out of COVID-19, ”he says, describing himself as“ very happy and humble ”that the business“ survived ”- before immediately qualifying the remark as:“ And not just surviving; but we managed to come back so strong that we are now making twice the revenue from 2019.
“The passenger industry as a whole has not yet returned to 2 times since 2019,” he said. “We are much more efficient – the road to profitability is much closer, so it just tells us that we do not need to continue to raise large sums of capital and I prefer to be independent as soon as possible. So it’s largely a decision about where the business is today, not the need to just keep going. “
How close is the profitability for Omio? Shaam characterizes the key stage that is now looming on the horizon – saying: “We see very clearly [it] in the near future.”
“Overall, it’s also a function of how efficient the business is,” he added. “We become more efficient with scale, and with growth we become even more efficient – which is almost a little intuitive, because when you grow very fast, you lose some efficiency and you have to catch up.”
Asked what is down the track – and whether Omio is planning an IPO – Shaam called it “a little premature” for such plans, while signaling that he hopes to find himself in the near future. (“The company is better prepared to be – I hope – a public company one day soon,” he put it.)
However, he also points to the current state of public markets, as technology stocks continue to suffer, apparently the brakes on moving forward on this front right now.
“We created the discipline internally from an operational point of view – our operational leverage has grown tremendously,” he tells us. “We are significantly more profitable based on the contribution margin. Our operating costs are low. Both businesses, Omio and Rome2Rio, which we acquired, exceed all our domestic forecasts by significant levels. So for now, we will just continue – as we do – financial closure on a quarterly basis with IFRS [international financial reporting standards] etc. So we have – let’s say – a lot of the tools that are needed, if not all, by a public company, and we’re just going to keep an eye on the markets. “
Omio operates in an area where there is no shortage of competitors for passenger attention, but its platform is multimodal – meaning it can cover many modes of transport, from buses and trains to flights and ferries (compared to of the prices made in) – which makes it a more comprehensive option for planning a trip compared to (simply) consulting on sites for booking trains or flights.
However, travel does not have to be complicated, multi-legged; Omio can sell you a ticket only to get from city A to B (or for an airport shuttle) using only one mode of transport. But there is no doubt that the main platform stands out off the road, which is less traveled – as it is focused on building its inventory as a whole, rather than concentrating efforts around large centers. Which means that as the pandemic shakes into a longer queue of behavioral impacts – a change in how, where and even when and how people travel – its business seems well set up to adapt to and cater to this changing demand.
This includes the ability to address growing concerns about climate targets – and the need to reduce emissions in the travel sector – given Omio’s early focus (when it was called GoEuro) on train travel, which remains a much more sustainable choice than flying. , for example; as well as the years of work he put in to attract state-owned railway companies to his reservation platform. (A recent addition is Portugal’s state-owned railway company, Comboios de Portugal – making Omio the first third-party booking platform to sell its tickets.)
“There are some fundamental changes in the behavior of consumers who travel, which is to our advantage,” said Shaam. When COVID-19 hit, we focused on them as a pledge – and invested in them – which was more land transport, more application-driven reservations (compared to pavilions) (more focused on our main strength, which is traveling outside the center; smaller cities – so during COVID-19 it became “work everywhere”, go to less crowded places – and now it’s more like people travel; I will not say “long queue”, but definitely not only for the crowded centers.
“And all these destinations need access to land transport – and these customers are making reservations from mobile – so these major changes are very, very strong and we’ve been able to capture a lot of that… So we hope we’ve taken a good market share , given that revenues are relative to the industry as a whole.
Asked about the most difficult moment he faced as a founder after the pandemic, Shaam cited the crushing impact of the first wave of COVID-19 to hit Europe in late March / early April 2020, when Omio saw that 98% of their revenue has dried up. “And I wasn’t sure how to make a head or a tail of whether we would survive or not at that time – so it was a difficult moment, followed immediately by vacations, restructuring so there was only one [hard moment] after another. ”
But he also described a second difficult moment that had been sustained over the years as a result of the uneven impact of COVID-19 – which he said made it even harder to navigate. Even if, in the end, the company that emerged from the pandemic, with all its hallmarks associated with COVID-19, is certainly a stronger, leaner and more dedicated business.
“There were specific industries that were fully justified … and other industries that were experiencing their best days. And it was much harder, as CEO of one of these companies, to find my way around, ”he said. “Labor markets are fluid and [people] those who believed in business stayed – and that’s very good for me, because it shows that they believe in business, and I’m very grateful for that. “