TripRebel Meets The Crowd
In ‘X Meets The Crowd’ I talk with entrepreneurs in the middle of their crowdfunding campaign. What’s the story behind their project? What are they looking for in an investor? Why do they think they stand out and what do they offer investors? Find out everything you want to know here, on our HelpTheCrowd Blog.
This week I dived into the world of travelling, speaking with Carlos Borges, CEO and Co-Founder of TripRebel. He graduated in travel management, worked for airlines and hotels, spent some time in the world of consumer goods, and came back to travel once founding TripRebel. Returning to the roots.
HTC. So what is it you do?
Carlos Borges. TripRebel is for us a work of passion. We are all passionate travellers, we have always been involved in planning trips for ourselves and for our friends, and know that is still a very big hassle. So we decided we wanted to build something that helps consumers like us decide faster. That’s how we created TripRebel.
The problem we are solving there more specifically is the fact that consumers never really know when is the best moment to book. They’re always trying to understand if the offers they are seeing right now are the best ones, or if they should wait a bit longer. With TripRebel you don’t need to do that anymore – you book what’s available with the prices of today. Yet we keep looking for better rates until the date of your check in: if the prices go down, or if there is a better offer in the market, we identify that and take it automatically for you.
HTC. What’s in it for the hotels?
CB. For them it really is having a different partner, the more diversification in the market the better for them, so that’s one thing. Then there is the problem of price fluctuation. The issue is that the hotels don’t have the visibility of demand, that’s why they fluctuate the prices. They don’t know whether it’s going to be a busy day or not in advance. On top of that you now have a lot of products putting extra pressure on this, by teaching consumers to wait until the last minute, and as a result the booking windows reduce.
TripRebel is one of the only products out there that allows consumers to go back to their, let’s say, behaviour of booking early, of planning a trip. Even though a lot of stuff is getting real time, I believe we do still need to plan certain things, and I think that’s where we fit in to. We help hotels to sell their product earlier and understand demand for a certain destination earlier as well, that’s our contribution to the market. We also contribute to increasing booking windows, so we kind of reverse the trend of booking last minute.
HTC. Tell me about the donation feature.
CB. The idea comes out of the fact that we want to give meaning to the money that we are saving for our customers. For us it’s important to say okay, so this thing makes a difference. We’re offering you an upgrade, or something extra that you can do at your destination, or you can make someone’s life better. This is where the donation feature comes along. We have established a partnership with a German NGO called Welthungerhilfe, it’s a very well rated NGO here in Germany and they support different projects across the world. We selected projects that are somehow related to housing, because of course hotels are all about having a roof over your head. This period we are supporting a project for reconstruction work in Nepal after the earthquake. The emergency measures were taken, but now it’s time for reconstruction and making sure that these people get a normal life again.
HTC. Where do you see the biggest challenge for TripRebel?
CB. No other company is doing what we do. The main problem is not the new competitors, but it’s more the established players. The travel industry of course is very competitive, it’s a big market but a very full one. So for us, the biggest challenge is user acquisition and retention. Acquisition in a sense is easy because it’s a matter of money. The hard part is retention, to really make sure that the customers stay with us. Looking at the short term the main challenge is funding, that’s why also we did the crowdfunding campaign, to give us a booster. Looking more let’s say, mid to long term, the challenge there is retention, really getting people hooked on TripRebel and loyal to the platform.
HTC. Why did you go for crowdfunding rather than financing through a bank?
CB. Well, first of all I think that the banking environment is still not very startup friendly in Europe. It’s not an option for us, and has never been one in such an early stage where there still is a relatively high risk involved. Banks are not ready for that, that’s unfortunate but that’s how it is. So therefore we would rather have the option of business angels, VC’s, or crowdfunding I would say. We already did a bit of everything and we saw that our business angels were very helpful. They were using our product and they were recommending it a lot. Crowdfunding basically is like having thousand business angels, right? Thousand people really pushing your product and being the ambassador of your brand. This is why we said okay, actually we’ll be having two things at the same time; on the on hand we close our funding gap, and on the other hand we have a huge group of investors, super engaged people that can help us. This was the most important reason for us to go for crowdfunding.
HTC. You have a business valuation of 3 million euros, how did you determine this?
CB. There are two things, one is what we already know from former rounds. We have been talking to different investors, we have raised our round before, we know where we were and we know what we did after that. This is kind of, let’s say, our view on that. On the other side there is Companisto, the platform we’re raising money on. They have already been involved in over 50 rounds with other companies and therefore know things like ‘where is this company, what is it’s profile, where is it standing now’ etc. and also what they believe is the right valuation for it. In the end, the two worlds meet and you come together with a valuation that makes sense for both sides.
HTC. What is the best question you got from an investor?
CB. Since we’re talking about crowdfunding, I’d like to comment on the crowdfunding questions. We got quite a few questions and they are incredibly, incredibly detailed. That’s something that really surprises me and they are very well articulated. I think there is this impression that people have about crowdfunding being people playing around and not knowing what they’re doing, that is not true. I have the impression that these guys out there, they know what they are doing, they ask the right questions and they see the business from the right perspective, which is great. In one case we had an IT person that was considering investing and he did like a bug report of the site. Naturally, you’ll always have small bugs here and there and he basically went through the entire website, which is really cool. We obviously have our own control system for this kind of stuff, but it’s always super helpful to get feedback from other people about things that are not working perfectly.
HTC. What are you planning to use the money for?
CB. We are of course going to further invest in technology, meaning the price algorithm over time which keeps searching for better rates. This is going to be part of where the investment will go, but the biggest focus is going to be on making TripRebel more known out there, so that’s marketing basically. Part of this is of course the TV campaign that we are doing, extending that as well, and the other part is investments on search engine marketing and so on.
HTC. What has been the highlight of your TripRebel adventure so far?
CB. I would say the day we started the crowdfunding campaign. We established a goal to raise 60k on the first day and we raised over 100k. We were at 60k after two hours or something like that, so that was really amazing. Everybody was screaming and cheering, it was just awesome.