New York Times: GetYourGuide, a Tourism Start-Up, Raises $25 Million in Financing Round
By Michael J. De La Merced
July 31, 2014
A start-up hoping to do for tourism what OpenTable has done for much of the big-city restaurant business – helping it gain popularity on mobile devices and the web – has just received a big vote of confidence from investors.
GetYourGuide, a five-year-old compendium of tourism activities, plans to announce on Thursday that it has raised $25 million in new financing from two existing investors, Spark Capital and Highland Capital Partners Europe.
The new investment reflects the growing interest in creating market places for traditionally independent operators, be they chauffeurs or house cleaners. The models are Uber, the hugely successful car ride service, and Airbnb, the home rental giant, both of which have fetched dizzyingly high valuations in recent financing rounds.
For GetYourGuide, the industry is tourism, where scores of small-time guides and activities providers have yet to make the transition onto the Internet. What began as a social network for travelers, founded by a group of students, soon became a collection of tour guides – and then grew into an ever-growing list of activities for cities like Paris, London and New York.
Unlike others who seek to make a go of the tourism business, many of whom try to present carefully curated experiences, GetYourGuide is aiming to be the most comprehensive listing of tourism guides and activities around.
“We were the first real mover in the entire industry,” Johannes Reck, a co-founder and the company’s chief executive, told DealBook by telephone. “We want to capture the entire supply of things to do.”
The profit potential is huge, said Alex Finkelstein, a partner at Spark Capital. By GetYourGuide’s reckoning, the market for travel activities is $100 billion.
“I like this business because no one’s really aggregated this before,” he said by phone.
Mr. Finkelstein added that the draw of what he called “in-destination activities” is self-evident. Priceline.com, for instance, agreed last month to buy OpenTable for $2.6 billion, adding restaurants to its flight and hotel booking options.
At the moment, the company claims to offer over 25,000 activities in 2,400 locations around the globe. But the start-up has its eye on more than just breadth of offerings: It is working on providing a reservation and payment system for its listings, again following in the footsteps of OpenTable, Airbnb and the like.
So far, GetYourGuide has drawn support from investors and experienced entrepreneurs. Spark and Highland Capital led the company’s previous financing round, which brought in $4.5 million. And on the start-up’s board are Kees Koolen, formerly chief executive of Booking.com, and Fritz Demopoulos, a founder of the Chinese travel site Qunar.
While other start-ups are also looking to chart their own course for the tourism industry, Mr. Reck said he expected bigger fry – companies like Expedia, Priceline and perhaps even Google – to try to compete in the market as well. But he is counting on GetYourGuide’s head start and enormous inventory of activities to serve as a robust defense.
“Some people have started to copy our concept,” he said. “But the number of activities that we have brought to market is second to none.”
With the new capital, Mr. Reck said the company would focus on continued international expansion and on building out its mobile apps, which it rolled out a year ago.
He declined to comment on the company’s financial performance, except to allow that the start-up was “on a trajectory to break even.” At the moment, it is more focused on investing in new locations and offerings.
He also insisted that GetYourGuide had more work to do before it weighed a way to cash out, either through an initial public offering or a sale of the company.
“We don’t have an eye on a liquidity event,” he said. “We all agree on the board that we want to build a bigger company.”
To read the original, go here: https://dealbook.nytimes.com/2014/07/31/getyourguide-a-tourism-start-up-raises-25-million-in-financing-round/?mcubz=1