Wego’s expansion into the business travel sector, facilitated by its acquisition of Travelstop, is a strategic move driven by market opportunities and the company’s desire for diversification and growth.
Middle East-based online travel marketplace Wego has acquired corporate travel platform Travelstop as part of its expansion into business travel and expense management.
Speaking to Skift, Wego CEO and Co-Founder, Ross Veitch, refrained from disclosing the acquisition’s financial details. However, he said, “I see a wide-open opportunity to bring next-generation business travel and expense management products to markets where Wego is already well established and being used to book a lot of self-managed business trips.”
A Brief History of Travelstop
Travelstop, founded in 2017 and based in Singapore, aimed to extend the benefits of business travel management to small- and medium-sized enterprises and other modestly-sized businesses throughout Southeast Asia.
Travelstop was also among Skift’s list of the world’s top 25 travel startups to watch in 2019.
The company was co-founded by Prashant Kirtane, Vijay Aggarwal, and Altaf Dhamani. After raising $1.2 million in a seed funding round, Travelstop had raised $3 million in a funding round led by Silicon Valley-based venture capital firm Accel in 2019. This had also marked Accel’s inaugural investment in corporate travel and expense management in Asia.
Kirtane had co-founded Travelmob in 2012 with Turochas Fuad, which was subsequently acquired by HomeAway in 2013. Aggarwal and Dhamani also had prior experience at Travelmob, and all three founders had previously worked together at Yahoo Southeast Asia.
Interestingly, Wego’s Veitch had been an investor in Travelmob and had previous ties with the trio from his Yahoo days, where he had established Yahoo’s Southeast Asian operations in Singapore.
Discussing the acquisition, Veitch highlighted key factors motivating the decision, including the strong founding team’s presence, the prior association at Yahoo and his previous investment in Travelmob. He also emphasized that Travelstop’s product and platform were tailored specifically for the emerging markets of the Middle East, Northern Africa, and the Asia Pacific regions.
Business Travel in Middle East and Africa
Business travel in the Middle East and Africa region achieved 86% of its 2019 levels during 2022, outperforming the recovery in Americas, Asia Pacific and Europe, according to the Global Business Travel Association (GBTA). The region is expected to return to pre-pandemic business travel spend by 2024.
The region also accounted for approximately 2.5% of overall business travel spending in 2022, amounting to $23 billion.
With this acquisition, Wego aims to address the unique challenges faced by businesses in emerging markets, such as fragmented travel options and manual expense reporting.
Veitch mentioned, “When we analyzed the itineraries being booked on Wego today, we estimate 30% of them are for self-managed business trips.”
For instance, a common scenario includes trips like Dubai to Riyadh for a single adult, departing on Sunday morning and returning on Thursday evening. This has led Wego to perceive a significant opportunity: firstly, to facilitate the transition of these individual employees towards a managed business travel and expense management solution, and subsequently, to extend travel management services to encompass the entire organization.
The Opportunity for Wego
The combined platform aims to position itself as a one-stop solution for corporate travel management, while offering enhanced visibility and control over expenses.
Responding to Skift’s query on the organisational structure post acquisition, Veitch said, “Prashant Kirtane will remain Travelstop CEO and Travelstop will operate as an independent company within the Wego Group, but we’ll cooperate closely across many functions.”
Sharing his perspective on the acquisition, Prashant Kirtane, the CEO and co-founder of Travelstop, said, “Our focus on product innovation and on customer satisfaction will enable us to set new industry standards and redefine the future of business travel.”
Talking about the opportunity in business travel, Veitch said it accounts for about 30% of the total travel market in both Middle East and Northern Africa and Asia Pacific regions.
“Venturing into this sector immediately broadens our target market by 50%,” he noted, emphasizing that this segment offers higher profit margins and greater predictability compared to the consumer business. Veitch expects this to significantly improve the group’s profitability.