Travel and tourism are coming back online in the wake of COVID-19 restrictions getting relaxed, and today a startup tackling one part of the equation for getting from home to one's destination is announcing some funding to capitalize on that. Bookaway, which has built a platform for people to view options for and book their ground transportation -- journeys from a long-haul arrival point to a hotel or other final destination, with some 7,000 providers listed in all currently -- has raised $35 million.
The Tel Aviv-based startup's Series C is being led by Red Dot Capital Partners. Menorah, an insurance company based in Tel Aviv, and New York-based Tenere Capital, along with previous backers Aleph, Corner Ventures and Entrée Capital are all also participating. The company is not disclosing its valuation but it has raised $81 million to date.
The travel industry sometimes feels like it is in a perpetual state of consolidation: partly because of price pressures due to the slowdown of the last few years; increasing fuel prices; and general competition, companies like Airbnb or Booking, airlines, and hotel groups build more services into their offerings in an attempt to improve their margins and bring more economies of scale into their operations.
But Noam Toister, the CEO and founder of Bookaway, believes that a huge opportunity remains in ground transportation largely because of how offline and fragmented it is, including when it comes to traveling to remote or exotic locations.
"Our group was born during the COVID-19 pandemic, based on a shared belief that the ground transport industry will better meet the needs of travelers when it is united, not fragmented," he said. The company has already made four acquisitions underscoring how some of that de-fragmentation will come in consolidation within the specific area of ground transportation itself. Founded originally to provide services in Asia as Bookaway.com, when bookings collapsed, it started to raise money to buy up other similarly challenged businesses to shore up for a time when the tide would turn: 12Go and GetByBus acquisitions followed to expand in Asia Pacific and the Balkans, and then Plataforma 10 in Argentina followed.
In all, the company has knitted together thousands of providers -- most of them independent and very local businesses -- on a platform that travelers can use to book their journeys ahead of time, with providers including busses, ferries, trains, private transportation options and more. Digitizing that experience in itself is a big undertaking and shift: Some 95% of ground transportation providers are "offline" according to Toister, and there are some 10,000 globally in what is collectively a $157 billion annual market. "If you are traveling in the world you book flights and hotels, but most destinations still don’t have an airport," he said, meaning transportation from the airport to the hotel is a trek, "and it’s hard to book transport currently."
He notes that Uber and companies like it are not currently seen as competitors although Uber has recently started to wade into this market, representing a potential threat, or perhaps a partner. "It's heavy lifting to connect with 7,000 transport companies globally," Toister said.
“This is an experienced management team that have grown successful travel tech companies before," said Barak Salomon, managing partner, Red Dot Capital Partners, in a statement. "With a complex task like globalizing ground transport you need local knowledge, technology expertise and industry experience. Bookaway Group has all three and they’re committed to winning this market.”