Hopper raises $16 million for a travel app that tells you the best time to fly
(Image from TechCrunch)
Hopper, the makers of a handy travel application that tells you the best time to fly in order to find the best deals, has now raised additional capital to continue to grow its business. It has also scored a partnership with American Airlines which allows it to sell AA’s tickets through its app. In terms of the new investment, the company announced $16 million in a growth funding round, led by BDC Capital IT Venture Fund. Existing investors, including OMERS Ventures, Accomplice (formerly Atlas Venture) and Brightspark Ventures, also participated.
That brings the startup’s total raise to date to $38 million.
Though the travel space is rife with competition, Hopper has developed a useful application for those looking for an easier way to figure out when to fly in order to save money on airfare. Its prediction engine uses data and analysis from “billions” of tracked flight prices to suggest when travelers should buy tickets. The company claims that it’s capable of saving customers up to 40% on their next flight, thanks to its service.
While ever-changing airfare ticket prices are a complex thing to track, this data is presented to Hopper’s end users in an easy-to-read format by way of Hopper’s app. Here, customers can view color-coded calendars which shows which days are affordable (green) to travel, all the way up to expensive days (red.) You’re also able to watch trips, get detailed forecast data, receive alerts when fares drop and more.
The end result for customers is being able to snag a ticket without overpaying – though having more flexible travel dates, of course, helps.
What’s also interesting about Hopper is that it’s entirely focused on delivering its product by way of a mobile app, not a website. According to Hopper’s CEO and founder, Frederic Lalonde, previously a VP at Expedia, the company isn’t a “mobile-first” startup – it’s “mobile-only.”
“We fundamentally believe that the mobile app experience in one shape or form is going to take over all commerce,” he says. “A hundred percent of what we do is based on mobile. And beyond that, we’re very much a conversational company in the sense that 90 percent of what we sell comes from a push notification.”
In other words, when Hopper alerts its users that now is the time to buy, they do.
While the company doesn’t disclose its revenue, Lalonde would say that everything related to its service is growing at roughly 40 percent month-over-month, and he believes the app will reach 1 million downloads per month this summer.
Hopper is still a relatively young company. It launched in early 2015, and was named the #7 best app by Apple that same year. It’s also a #4 travel app in the U.S. on the App Store, and #1 in dozens of countries.
To date, the app has been downloaded over 3 million times, and has monitored fares for over 5 million watched trips worth over $4.5 billion in gross booking value. It has also sent over 38 million push notifications to users, with 7.3 million being sent last month alone, the company reports.
Hopper has increased its accuracy since its debut, too, and now claims it’s 95 percent accurate in terms of predicting ticket prices within $5 of the actual fare up to a year ahead. But Lalonde points out that, while Hopper has improved its performance 3 percent since last year, it has done so in areas that matter – like holiday travel, for example.
In addition to the new funding, Hopper has also now signed a deal with American Airlines that will make American Airlines and American Eagle fares available in its app. This includes around 6,700 daily flights to nearly 350 destinations in over 50 countries. This is notable because AA was one of the few holdouts to yet offer its fares in Hopper
The app today supports almost all major airlines’ fares. The company’s business model involves a combination of compensation from airlines, and a $5 convenience fee charged to consumers.
With the new capital, Hopper plans to grow its team of 25 in Montreal and Cambridge.
It’s soon rolling out a number of new features that will allow it to push recommendations to users and offer a more personalized experience. For instance, users will be able to specify things like a desire to avoid long layovers or the ultra-low cost fares in favor of regular tickets, and the app will suggest things users may not know to look for – like alternative airports, for instance.
The startup also plans to increase its focus on international travel by year-end, with a focus on more accurate pricing, no matter where users book.