Investors have put $100 million into this travel media start-up — here's why it's so hot

In a world where media companies are competing against Google and Facebook for eyeballs and ad dollars in a fight that has seen some publishers going out of business, online travel magazine Culture Trip appears to be bucking the trend and reaching the elusive millennial audience.

Earlier this year, it raised $80 million from investors, reported by the Financial Times to be one of the largest-ever finance rounds for a European media start-up, taking overall investment to more than $100 million.

Culture Trip is a London-based website started in 2011 by former psychiatrist Kris Naudts, who claims almost 20 million people visit it each month — and that figure is growing. Compare that with Conde Nast Traveller (3.4 million) and Lonely Planet (around 17 million) and it already looks like a success story, although Culture Trip does not disclose how many of its users are registered.

The site aims to tap into millennials' desire for experiences over ticking off landmarks according to Chief Marketing Officer Mike Fox, a former Facebook marketer who joined the site in January.

A screenshot of travel website Culture Trip
Culture Trip
A screenshot of travel website Culture Trip

"We're not a brand that's really good for people that want to have a Mai Tai on a beach, you know, or if they want to go… to New York and stay at a Holiday Inn and go to the Statue of Liberty," he told CNBC. There's also an element of bragging rights: "They want to discover things that their friends haven't found yet," he added.

It's the sheer volume of articles, photographs and videos created by a network of about 300 freelancers in 150 cities that has helped it get high up Google search pages, with around 3,000 new pieces of content posted per month, according to Naudts.

The investment, which included financing from Czech fund PPF, happened pretty quickly, Naudts told CNBC. "(It was) a lot faster and a lot more dramatic than was actually predicted or forecasted. So our journey here is one of about three, four years of bootstrapping and experimenting and messing around," he said. Naudts raised $2 million in seed funding from Silicon Valley in 2015 and then $20 million in 2016, before the current round.

The money will be spent on hiring people and developing technology; Naudts has already gone headhunting in Silicon Valley to get a bit of "reckless ambition" into the mix. It has 265 staff in offices in London, New York and Tel Aviv and the company has around 100 vacant positions right now.

Look at the site today and it's obvious there are many articles — "13 Reasons to Visit New England This Fall," "11 Unusual Dubai Laws for Tourists and Residents" — but it appears a little disorganized, admits Ben Shacham, its vice president of content.

Culture Trip founder and CEO Kris Naudts (left) and Chief Marketing Officer Mike Fox (right)
Culture Trip
Culture Trip founder and CEO Kris Naudts (left) and Chief Marketing Officer Mike Fox (right)

"You will land on (a) page and because we're not (yet) solving the user problems well enough, you basically get presented with a 'soup' of content," he told CNBC. "Most people go, 'Oh wow, that's amazing. Culture Trip has so much content on there.' But then they kind of get lost like, 'Oh, this is all interesting stuff, but it's too much work for me to figure this out.'"

To help fix this, Shacham has reorganized the content team so that different types of people sit close together: an engineer might be next to a writer, for example.

The ultimate aim is to make Culture Trip a one-stop shop for planning and booking vacations, solving the problem of using multiple sources to research a trip, plan an itinerary and then pay for it, Fox told CNBC. The team wants to turn the travel-booking process upside down. "It's kind of crazy to me that… the whole consumer set has been conditioned by the booking engines to book their flights and their hotels before they know what they're going to do."

"It's really for anyone in the mindset — and millennials happen to be like this more as a generation — that is looking for an authentic experience and a local place," Fox said. With that in mind, Culture Trip will develop products like its Wishlist, helping people work out what they want to do on vacation ahead of booking it.

"You can put some ideas up over to the side (on the Wishlist). In one click we can build you an itinerary and in another click you can book that itinerary… and then your phone is the thing that you take on the trip. It… contains your itinerary, the maps, everything that you might need," Fox said.

These functions are being worked on right now and with the appointment of former Expedia executive Andy Washington as senior vice-president of travel, expect the solution to be "very disruptive," according to Fox.

But as with many start-ups, the direction of travel isn't fully fixed.

"It's been very similar to the early days of Facebook when… we knew we had something, but we didn't know what we were going to do with it. And, bit by bit, we just sort of started to figure out all the pieces of it," Fox said. He joined Facebook in 2009 and saw Mark Zuckerberg switch the "Become A Fan" idea to the "Like" button, worked through the social media site's pivot to mobile, and started to build the ad business. "Microsoft was selling our ads when I walked in there in the first place," Fox said.

At Culture Trip, Fox oversees brand advertising, PR, a growth team in charge of acquiring new site users, and product marketing management, a group of marketers that understand both what site visitors want and have technical knowledge — a specialist he says is hard to recruit.

His team is also doing qualitative research to discover more about its audience. "Some of the things that are we're interested in figuring out is, when we make a recommendation, what is it that, why do people trust our recommendations?"

Expect "large scale" marketing in 2019, an event at tech conference South By Southwest in March, and much more personalized newsletters that will be emailed to people based on what they've done on the site. Culture Trip is unlikely to rely heavily on external creative agencies for any advertising, however. "You're almost better off just doing it yourself because you understand your business and your data better than an agency can," Fox said.

Branded content is another focus for next year and current clients include Corinthia Hotels and swimsuit brand Figleaves, with automotive brands and banks also interested. News won't be a focus (but there is edgier content such as "How Targeted Dark Ads Are Manipulating Your Opinions"), partly to avoid advertising appearing next to negative news stories, but also because features are "far more monetizable" than news, according to Naudts.

As the travel booking engine develops, how can the audience be sure that articles and recommendations are unbiased, and not just there to promote a particular hotel that Culture Trip will earn commission on?

Shacham says there has been "a lot" of discussion about this. "Users nowadays are smart, they can feel… kind of allergic to that and it doesn't work," he told CNBC. Chief Product Officer Nick Jakobi, who spent eight years at Google, advocates the search giant's mantra, "Put the user first and everything else will follow," Shacham said.

"It has to feel genuine and (be a place) that the person on the ground actually would want to recommend and wants to stay there, or has to be very clearly a different thing and the user is fully aware that you are offering them (a deal) on the airport hotel just because it's really convenient... You have to be really clear about that and, ultimately, it will not work unless the users have that trust," he added.

Profit is not a target, for now. Naudts expects to carry out a further funding round before he even thinks about margins, although he has high ambitions. Airbnb could be a partner, he suggests, but also an original content producer for the likes of Amazon, Hulu and Netflix.

How would that partnership with a Netflix work? "We could make content for them, right. We have the creative network to do to do that. And they would pay for that content."