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Founded By Former Expedia Engineers, Stealthy Travel Startup Hopper Closes $12 Million Series B

By Sarah Perez, TechCrunch

Wednesday, August 15th, 2012

Hopper, a stealthy consumer-facing travel startup in development for nearly five years so far, has closed on a $12 million Series B round of funding to grow its team in Boston. Hootsuite, BuildDirect and Wave Accounting investor OMERS Ventures led the round, and Brightspark Ventures and Atlas Venture participated, bringing Hopper to a total raise of $22 million. What’s interesting about the company, despite not knowing exactly what it’s up to, is who’s behind it. The company’s executive team is staffed up with former Expedia engineers, including founder and CEO Frederic Lalonde, co-founder and VP Product Joost Ouwerkerk, VP Technology André Coudé, and CIO Mathieu Patenaude. CMO Dena Yahya Enos is formerly of TripAdvisor.

Lalonde describes Hopper’s product as a “discovery and recommendation engine” for travel, but that description could be applied to dozens of startups. What’s Hopper doing differently? Two words, he says: big data.

“When we started this, we didn’t know we would become a ‘big data’ company,” says Lalonde, “that word didn’t even really exist. We were just coming at it from what we’d seen previously, which is that planning a trip – for all of the might of TripAdvisor, Expedia, and all these other travel companies – is tedious, frustrating and it’s actually pretty awful. The experience is broken, everything’s fragmented, and you’re jumping around from one website to another,”  Lalonde says.

So with Hopper, the team has been aggregating data from around the web to build a structured catalog of everything that’s not a flight or hotel. Or more specifically, they’ve built algorithms with a “formidable amount of human effort,” that are doing that for them. To date, Hopper has aggregated half a billion webpages in the travel vertical and has pulled out structured content to create its very large travel database. And that number is set to reach over a billion pages by year-end 2012.

But to be clear, Hopper won’t be a travel search engine. Search engines, explains Lalonde, are only good if you know what you’re looking for. So he offers a different analogy: “if you take the music industry, there’s a bunch of value-add services like iTunes, Pandora to the Genius  engine that Apple has. Those things are only really possible because there’s a complete, structured catalog for music…so you’re able to build recommendation engines and do all sorts of things,” Lalonde explains, “but in travel, it’s really a mess.”

He says that the travel companies in the industry today have been in a holding pattern for a decade. A lot of the technologies they’re built on have hard constraints, too, and the brands can’t just step away and rebuild from the ground up. And other web startups rethinking travel discovery and recommendation are approaching it from the social angle. (For example, JetPac just raised $2.4 million last month for its social travel startup).

But Lalonde thinks that’s the wrong way to do things. “At the risk of being controversial, I think social is secondary,” he says. “In order to enable social, you must have a structured catalog, which we believe needs to be done through big data. Otherwise, you’re taking your social signal and attaching it to mud.”

Nope, not controversial at all.

He adds that even if you have hundreds of friends on Facebook, you wouldn’t trust recommendations from all of them anyway. Travel recommendation and discovery is a big data problem, and social is grafted on top of it, Hopper believes.

So, if not Facebook, where is Hopper’s data coming from on the public web? Some of it is from blog posts. There are 2 million of these per day, and “travel” is the fifth most used tag, according to Lalonde. But most users researching travel on the web never get to see this user-generated content. “You would be disgusted at what you’re missing,” he says.

And from the sounds of it, Hopper isn’t just looking at public data, it’s also doing deals with travel partners for access to their proprietary content. And thanks to a little fortunate timing, these players have been keen to make new kinds of deals, following Google’s buying spree in the travel/user reviews space which has included Zagat, ITA and most recently, Frommer’s. What travel partners specifically are involved, Lalonde won’t say, but it covers the gamut from price aggregators to content providers, he would admit. (Hmm, maybe some of the Fair Search backers are involved, if we had to guess.)

Enough teasing. When will users see this thing and what will actually be? Second half of 2012, and something built with HTML5. Mobile or web? Both.

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