Options Away, a provider of a service for locking in airfares as a hedge against airline price hikes, has locked in $3.5 million of fresh funding.
The Series A equity round was led by OCA Ventures. Also participating were Thayer Ventures and Pritzker Group Venture Capital.
In total, the Chicago-based startup has raised $5.5 million to date. It declined to say what valuation this round places on it.
Options Away offers the ability to book today's price on a future date on tickets for flights from US origins to North American destinations. It plans to use the funding to enter more international markets by June.
It has signed deals with metasearch site Hipmunk, online travel agency Expedia, and other industry players to integrate its Hold solution into the workflow of those companies.
In June, Options Away will go live on the travel agency terminals of Sabre, the global distribution system. That will put the fare lock option in front of about 200,000 agents.
Options Away intends to experiment with selling more ancillary products and services, too. This is relevant because the startup interacts with the customer even when the transaction is through its business-to-business API.
If a customer buys an option (directly or through an agency, an online agency, or a metasearch site), he or she then comes to Options Away to exercise it, in other words, to buy the ticket. The company is an ARC-accredited travel agency.
Until now the startup has focused on the leisure market. Post-funding, it intends to expand to corporate travel.
There are other opportunities, too. It says it has received inquiries from credit card companies and loyalty programs, such as for making it possible to redeem miles to buy an option for a flight.
The founders, Robert and Heidi Brown, said in a statement:
Existing investors who participated include a group of seasoned European travel industry entrepreneurs led by Iglu.com chairman Martyn Williams. Members include Andy Phillips, former CEO of Priceline International, and Richard Downs, CEO of Iglu.com.
New strategic investors include Don Carty, chairman of Virgin America and former Chairman and CEO of AMR (the parent company of American Airlines). Also new to this round is Howard Tullman, CEO of 1871, the largest entrepreneurial digital startup hub in the US.
Joining the board are Peter Ianello, co-founder and general partner of OCA Ventures, and former president and CEO of SBC Capital Markets and Jeff Jackson, managing director at Thayer Ventures and former CFO of Sabre Holdings.
Options Away also announced the appointment of Adam Goldstein, CEO of Hipmunk, as an advisor.
More on the product
Previously, airlines such as Air France and Continental (now United) have similar guarantees, but they are specific to their own flights and are of limited duration.
Options Away was the first to come up with a service that works across carriers and for greater spans of time.
It charges between $4 and $50 per option to lock in an airfare up to two weeks prior to departure. If the price of the flight goes down, the customer gets the lower price.
The main points that determine the cost of the option are the flight price and the length of time the traveler wants to lock-in that price. The company offers durations of between 1-21 days. Shorter is cheaper, obviously.)
The company claims to have never had tell a customer claiming an option that they could not fly on their preferred flight. It uses data from two global distribution systems, Amadeus and Sabre, to feed its algorithms.
Options Away allows partners to integrate its Hold services into their website and workflow via its set of APIs. Or, the clients can leverage its white/private label services. There are also ways to mix the APIs and the white/private label service.
Hold and/or lock buttons, either under white or private labeling, can already be seen on several partner sites for domestic flights, with international routes coming.
On the business-to-business side, the startup's leading rival is Flyr, an airfare prediction startup in San Francisco that offers a white-label tool for selling insurance against price hikes, among other products. Flyr recently received funding from insurance titan Axa's venture arm to fuel its expansion into Europe.
MORE: Read the Tnooz profile of Options Away.