Snaptravel founders develop past journey with launch of e-commerce model and acquisition
The founders of Snaptravel venture outside of the world of hotel and flight booking to transfer the startup’s model to other e-commerce industries.
Snaptravel developed Snapcommerce, which will act as the new parent brand with the aim of bringing a number of other brands to market under the “Snap” banner.
“Our vision from the start was that consumers would want to have more meaningful relationships with … brands.”
“Our vision from the start was that consumers would want to have a more meaningful relationship with the brands they shop from,” said Hussein Fazal, who has assumed the cloak of Snapcommerce CEO, in a recent interview.
“We have always believed in that vision and we just happened to start with what everyone knows, which is Snaptravel,” he said.
Snapcommerce and future brands operate under Wise Travel Technologies, the same registered company name as Snaptravel. Fazal told BetaKit that he now considers Snaptravel to be the first of many future brands to come under the broader Snapcommerce umbrella.
Fazal and his co-founder Henry Shi (CTO) started Snaptravel in 2016. The startup’s AI-powered platform enables users to find and book hotels and flights through conversation tools like SMS and Facebook Messenger. In late 2018, Snaptravel completed a $ 28 million CAD Series A round with the support of Telstra Ventures, the venture arm of Australia’s largest telecommunications company, and NBA player Stephen Curry.
Since launch, Snaptravel has gained more than 2 million users. The startup also claims to have generated more than $ 350 million in revenue, which it attributes to building a “trustworthy relationship with consumers” through its predictive AI and chat capabilities.
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Snapcommerce will use the AI-based platform behind Snaptravel to expand into new industries. Fazal noted that with this vision in mind, Snaptravel designed a “flexible, AI-driven platform that is not vertically agnostic” for Snapcommerce to facilitate the transition of technology.
Snaptravel began expanding in late 2019. After the company had success and success with hotel bookings, it decided to develop its idea for a larger e-commerce (D2C) company, Fazal told BetaKit. According to Fazal, the company has yet to raise capital specifically for the Snapcommerce brand, but has piqued the interest of potential investors for future rounds.
To help drive the launch of Snapcommerce, the company acquired the intellectual property of Canadian chatbot marketing startup ChatKit AI earlier this year. Fazal declined to disclose the purchase price of the deal.
ChatKit AI was founded in 2016 and led by Mazdak Rezvani, who has since joined the ResQ restaurant market. Similar to Snaptravel, ChatKit AI connected consumers with companies through conversation channels and also used AI. His clients included D2C brands like MeUndies and Draper James, the Reese Witherspoon clothing line.
Snapcommerce plans to leverage ChatKit AI’s technology to expand its vision for a comprehensive e-commerce company.
The time to overcome the travel sector is in a year of turbulence for the travel industry caused by the COVID-9 pandemic.
In the US, one of Snaptravel’s key markets, the hospitality industry continues to struggle. Current data show that hotels are on average less than 50 percent full and two thirds are less than half full. While these numbers may be worrying, they still rose from their lows in March and April.
In March and April, Snaptravel saw revenue drop 70 to 80 percent, causing the company to lay off many of its employees. Fazal refused to provide the exact number of people laid off from Snaptravel, but claimed they were a quarter to a third of the startup’s team, which currently has 150 employees (including customer service reps). Snaptravel also cut its co-founders’ wages and took advantage of Canada’s emergency wage subsidy.
Even as the second wave of COVID-19 infections left the state of the hotel industry in the air, Fazal has seen a revival in the use of its platform, according to Snaptravel. The CEO pushed aside the idea that Snapcommerce is a linchpin for Snaptravel at a time when the travel industry is struggling.
“I would consider this an extension,” argued Fazal. “Our travel business … has actually grown and we are actually above the level before COVID. So we will continue to invest heavily in Snaptravel and continue to expand the hotel and flight business. This is just a natural extension based on our customers’ requirements. “
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Fazal attributed the return to pre-COVID sales in part to the surge in domestic travel in the US. With COVID-19 limiting travel to shorter distances and shorter stays, Snaptravel’s AI can more easily target and predict where customers want to go – and offers an even more personal approach, according to Fazal.
According to Fazal, Snaptravel is now back in growth mode and is hiring. The company is currently in a testing and planning phase to create new brands. One industry the company is researching is event ticketing, while others could include restaurant bookings or even the sale of goods.
“Much of this is actually coming from our … existing consumers,” said Fazal, who noted that Snaptravel users might use the platform to book hotels, but they will also inquire about local restaurants.
“[Our consumers are] often looking for much more than what we currently offer, ”said the CEO. “They are looking for restaurants, they are looking for tickets, for tours, for activities, they are looking for goods, [and] You really want more. And since we can of course offer them more, that helps the business. “