Tourlane, a German travel startup, secures $26M funding led by Sequoia

Tourlane, a German travel startup, has secured $26 million in funding, with Sequoia Capital leading the investment round. The funds will help expand the company’s operations and enhance its platform, which specializes in personalized travel planning. Tourlane aims to provide tailored travel experiences for customers, and this investment will support its growth and innovation in the travel industry.

Global travel is continuing to grow, with the World Travel and Tourism Council predicting the industry will surpass $11 trillion in revenue this year. Travelers are moving beyond post-COVID-19 “revenge travel,” allocating more of their budgets to diverse experiences. Adding AI into the mix has sparked renewed interest from investors in startups looking to innovate in the travel space.

Berlin-based Tourlane, a platform that allows users to plan and budget trips, combining flights, accommodations, activities, and tickets, has raised €25 million ($26 million) in funding. The funds aim to help the company capitalize on current travel trends.

The Series D funding round, led by Sequoia Capital, is intended to assist the company in reaching profitability, according to Tourlane CEO and co-founder Julian Weselek. The company will also use the funds to expand its technology, strengthen its AI capabilities, and potentially extend its operations to new markets beyond its current locations in France and Germany.

A key aspect of the investment is Tourlane’s focus on AI. Weselek mentioned that the company is incorporating generative AI into its service to create more intuitive experiences for users, guiding them to options tailored to their preferences. However, Weselek emphasized that this doesn’t mean replacing humans entirely. While AI can automate many aspects of the service, he questioned whether travelers would want to entirely rely on AI for booking important trips, such as a vacation tied to a significant personal event, rather than consulting with someone who has firsthand knowledge of the destination.

Tourlane is also investing heavily in AI for backend optimization. The technology will evaluate numerous combinations of flights, accommodations, car rentals, activities, and other variables to increase the likelihood of matching users’ preferences while boosting the company’s revenue. Weselek also noted that the company has around 500 employees, with about 150 serving as customer agents. He highlighted that the number of agents needed is decreasing as the use of AI increases, leading to greater efficiency in handling customer queries.

Beyond AI, Tourlane faces the challenge of scaling its operations. Founded in 2015, the company has been around for nearly a decade. To date, it has booked trips for 100,000 individuals, though this number is small compared to the 790 million global travelers reported by the UN in the first seven months of 2024.

Tourlane’s business model relies on commissions from the services it sells, but it does not disclose the exact fees, noting they vary depending on factors such as partners and services. While the startup’s growth is significant, it is still unclear what the financial payoff will be in the long run.

Sequoia Capital, which has made successful investments in the travel space, is now Tourlane’s largest outside investor. Andrew Reed, the Sequoia partner who led the investment, stated that AI is poised to revolutionize personalized travel experiencestarts, positioning Tourlane to cater to millions of travelers in the future.

Other investors participating in the Series D round include Target Global, HV Capital, and Jared Smith, co-founder of Qualtrics. Though Tourlane is not disclosing its current valuation, it had a $242 million valuation during its previous Series C round. The valuation has fluctuated due to the impact of the pandemic on the travel industry.

Weselek commented that company valuations can be highly volatile, influenced by external factors like investment trends and economic cycles. What matters most to the company, he explained, is that it successfully secured €25 million in funding from top investors, which will help it achieve profitability while continuing to invest in its product, service, and growth. If successful, Tourlane aims to create substantial value for shareholders in the years to come.

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Source: Techcrunch ‍