- TripActions rewards travelers for opting for cheaper hotels.
- CEO Ariel Cohen says he has no plans to sell the company.
- Clients include Box and Foursquare.
How do companies encourage employees from veering from the company travel policy? More often than not: guilt. Corporate travel start-up TripActions is trying Amazon gift cards.
The Palo Alto, California-based company created a corporate travel platform that aims to keep businesses' costs down by rewarding employees with gift cards and other perks for saving their employers money.
The company has raised $51 million in series B funding to help fuel a global expansion, TripActions announced Wednesday. The funding from Lightspeed Venture Partners and Zeev Ventures brings investment in the company to a little bit under $80 million.
CEO Ariel Cohen said he and co-founder Ilan Twig came up with the idea after selling a previous start-up and working for another company. They realized they were booking corporate travel based on their own preferences, not their employer's.
"The company dime simply ceased to matter to us," said Cohen.
TripActions, available in a web-based version or an app, gives employees a goal, a "price to beat" for the average hotel costs in that city. Over the last six months, nearly three-quarters of TripActions' users have booked a trip below the "price to beat" for that city, Cohen said.
Employees who meet the goal are rewarded with gift cards or credit toward a vacation if they succeed. Each booking costs $20 and the company also gets commissions for selling hotel inventory and other products. Its hotel-price data come from Booking Holdings, formerly known as the Priceline Group, and other sites.
It's a different approach than most travel managers. Nearly 90 percent of corporate travel managers surveyed by the Association of Corporate Travel Executives said they use "visual guilt," these cues to remind travelers they're about to veer from the company policy, by booking a certain airline, accommodation or price.
Less than a fifth said they use monetary rewards, a tool that other corporate travel companies like competitor Rocketrip use.
TripActions and other smaller corporate travel companies face tough competition from growing corporate travel giants that dominate company business travel such as Carlson Wagonlit and American Express Global Business Travel. The latter may soon get even bigger: Last month it said it would purchase British travel management company Hogg Robinson Group.
But TripActions is growing its client list, which includes online storage company Box Inc. and location-tracking platform Foursquare. On its side is the growth in business travel spending. Globally, business travel spending in 2016 was near $1.3 trillion, according to the Global Business Travel Association. The group estimates that figure grew by more than 5 percent last year and will increase 6 percent this year.
TripActions has 100 employees and plans to triple that this year. Cohen said he wants to open offices in New York, London, Tokyo and possibly other cities.
Cohen said he has no plans to sell the company.
Correction: This story has been revised to reflect TripActions' CEO said he was ruling out the company being acquired, not an IPO.