Business travel is one of the more enduring casualties of the Covid-19 pandemic. Just as health concerns ease and business class seats refill, recession concerns are encouraging companies to rein in expenses. Yet TripActions, a software company that sells tools to help businesses book and track corporate travel, has raised $300mn at a $9.2bn valuation — up from $7.25bn last year. This at a time when start-up fundraising is in the doldrums.
TripActions’ gross bookings in the three months to July were five times higher than the previous year. But overall corporate travel has yet to return to pre-pandemic levels, according to Deloitte. Half of travel managers it surveyed last year expected business travel to return to normal in 2022. As of April, that tally had fallen to less than a fifth.
Restrictions come not only from concerns about health risks and the increase in remote work but cost. Labour shortages across the travel sector mean prices will continue to rise, according to the Global Business Travel Association. The cost-per-attendee for meetings this year is expected to be a quarter higher than 2019. It is expected to rise another 7 per cent next year.
If TripActions can convince companies that it is able to save them money, such change may be in its favour. But a widespread downturn in travel will hurt. Founded in 2015 and based in Palo Alto, it has already experienced the repercussions of global events beyond its control. In early 2020 it laid off close to 300 employees as business travel was grounded.
Since then TripActions has developed its offer of expense management software, competing against companies such as Brex with its Liquid product, which covers short-term costs for companies that do not give employees corporate credit cards. It has expanded market share via acquisitions. In the past two years it has purchased Reed & Mackay in the UK, Comtravo in Germany and Resia in Sweden.
The company claims the travel and expense sector is worth $14tn. Its ability to raise funds at a higher valuation while start-up funding is otherwise in stasis puts it in a good position to scoop up struggling rivals. Still, cautious chief financial officers could yet spoil those plans.
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