If you travel a lot for work, you know there are two kinds of employees. There are those who spend less than the budget allows and those who push it to the very limit.
Most people don’t feel incentivized to save money for their employer, so that’s why a handful of startups are attempting to solve this problem by rewarding travelers for cost-savings. TravelBank is the latest to do a funding round, this time raising a $25 million Series B round led by DCM Ventures with participation from NEA and Accel. (Competitors TripActions and Rocketrip have recently raised money, as well.)
TravelBank analyzes flights and determines a reasonable cost upfront. Employees who go under budget split the savings with their employer. While they aren’t technically given cash for this, the money is now automatically put into accounts for Lyft, Uber, Airbnb or now Amazon — effectively a digital gift card.
Co-founder and CEO Duke Chung spoke about competing with Concur, which was acquired by SAP for more than $8 billion in 2014. He believes there is an opportunity to build better software for business travel. With a focus on small business, Chung says TravelBank has already signed up 800 companies in the first nine months.
He explained that not only do the companies save money by motivating employees to select cheaper flights, but TravelBank’s software is completely free. Instead of asking companies to pay for the technology, TravelBank makes its money through commissions from the airlines.
Rich Wong, general partner at Accel, said he was happy to invest in TravelBank because he not only believes in the idea, but has worked with Chung before. Accel invested in Parature, a startup Chung also founded, and that business was sold to Microsoft.
Wong pointed to the pressure that startups and other businesses have to focus on their bottom lines. These days “expenses actually matter,” adding that TravelBank’s concept “matches the sensibility of the time.”
David Chao, co-founder and general partner from DCM, said he invested because “the incentive alignment is powerful and makes the value proposition to any corporations a slam dunk.” He believes it has a “business model that aligns the economic interests of the company, employees and TravelBank via an app that functions as a traveling business person’s best friend.”
TravelBank previously raised a $10 million Series A round from NEA and Accel last year. Chung says the additional funding will be used to double its team from about 30 employees to 60 employees within the year.