Omio, the multi-modal transport booking platform, has announced $100 million in new funding.
Existing and new investors have participated in this latest round, including Kinnevik, Temasek, Goldman Sachs, NEA and Kleiner Perkins.
Speaking to PhocusWire, Omio's founder and CEO Naren Shaam, says the company’s (formerly GoEuro) core focus is putting the investment towards getting more supply onto the platform as well as developing the consumer experience.
He says that early data shows consumers are seeking more ground transportation options, increased flexibility around classes and fares and the ability to access everything via a mobile application.
“The drivers we were working on are accelerating post-COVID and that’s also what has enabled us to come out and raise strong financing.”
Shaam says the company, which has now raised about $400 million, had planned further investment in 2020 but put it off when the pandemic hit until it started to see things pick up in the second half of summer.
“The benefit we have is the calibre of investors already on the balance sheet and that gave us a lot of confidence. We did not actually go out, like in normal times, we already had investors interested in Omio pre-COVID, who had not come in during the last round, or had not had the chance to come into a primary round. We reached out to a handful and asked if they would you like to participate.
Omio was also able to move quickly through the funding process because it went down the convertible note route because of the current volatility in the market.
The company is also looking out of “opportunistic acquisitions” which could be geographical or more to do with segments within ground transportation.
In terms of potential gaps for Omio, Shaam says: “Supply is a gap as well as product experience and mobile ticketing. There are some broad brush strokes but that does not mean there are businesses out there that solve these problems.”
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Prior to the Covid-19 pandemic, Omio was on somewhat of a strategic growth trajectory.
It sealed a funding round of $150 million in late 2018 and acquired multi-modal rival Rome2Rio about a year later.
Then earlier this year, the company launched in North America.
Shaam says revenue and bookings dropped by about 95% when the pandemic hit and it went from a “growth business model” to having to manage its cash.
He adds that 50% of business has now come back in core markets such as France and Germany, where the company is based.
Overall Shaam is optimistic about recovery in the travel industry but believes it will have to change to being far more consumer centric.
“The travel industry is one of the most battered especially small and medium-sized businesses like hotel owners and tours and activities but it’s not like travel is going away. At some point travel is going to bounce back a lot stronger.”
Responding to a question on government bailouts for airlines with environmental strings attached, Shaam says he is also hopeful of a better industry in terms of the role of governments in shaping recovery.
“Billions of tax payer money is going into large incumbents and unless that is distributed to the smaller players the industry will be significantly worse coming out of this.
"If governments do a really good job they can shape the industry towards a lot more sustainably conscious, more consumer centric, driven by competition, driven by market forces industry where people can compete with each other.”
He is also positive about the future for Omio in the long-term, given the consumer trends it has noted and his hypothesis of a shift towards more consumer-centric products.
“I think that net net hopefully we will benefit because we are more diversified in terms of product, geography and focus on mobile and the customer experience.”
* Check this interview with Shaam for the How I Got Here podcast, recorded in September 2019.