Rocketrip believes you can motivate employees to spend less on business travel by rewarding them with gift cards. For each trip, the startup establishes a “budget to beat” and helps employees split the savings with the company.
The concept gained early traction and now New York-based Rocketrip is raising an additional $9 million in funding led by Bessemer Venture Partners with participation from existing investors, Canaan Partners and Genacast Ventures.
“We’ve got a strong and quickly growing client base and we’re going to use the funds to both enhance our solution to existing clients and expand our sales team to grow the business,” said CEO Dan Ruch, whose clients include Opower, Wayfair and some undisclosed Fortune 500 companies. “We’ve proven that the model works, that rewarding employees for company friendly behaviors creates a hugely strong ROI.”
Rocketrip estimates it saves clients an average of $301 per trip, or 27.6% beneath their trip budgets. Ruch said that Rocketrip is targeting companies that spend at least $1 million on travel, with its largest customer spending $365 million on business trips last year.
The startup builds algorithms that find real-time pricing for transportation and incorporates this information in a customized budget. Employees can book using their favorite travel sites and Rocketrip provides companies with insights and analytics about travel spend.
“The whole industry has evolved in a way that employees have no incentive to save money on corporate travel because it’s viewed as OPM, ‘other people’s money,’” said Alex Ferrara, partner at Bessemer Venture Partners. He estimates that corporate travel is a $1.25 trillion market. “If Rocketrip can make just a small dent in that number by driving cost sensitivity within employee ranks, it represents a huge win for employers, employees, and of course Rocketrip.”
Rocketrip has a SaaS business model and makes money based on volume of travel spend. In addition to gift cards, Rocketrip can reward employees with charitable contributions, travel benefits and other incentives.
Rocketrip previously raised over $8 million in funding from Y Combinator, CrunchFund and others.