LodgIQ is tackling hotel revenue management with a product it will reveal at the ITB Berlin trade show. Earlier this month, the New York City-headquartered startup announced that it has received $5 million in funding from investors Highgate Ventures and Trilantic Partners.
A Q&A with CEO Ravneet Bhandari:
Tell us how you founded the company, why and what made you decide to jump in and create the business.
LodgIQ was founded with the objective of re-imagining the discipline of revenue management for the travel industry, with an initial focus on hospitality.
Current solutions and the approach to forecasting and price optimization are based on a sub-set of available demand data.
By aggregating very large data sources and using machine learning across those data sets means we are able to surface buyer intent in way that hotels can capitalize on and improve their revenue performance.
We have assembled an experienced group of industry experts, Silicon Valley technologists and data scientists. We see a significant gap in the market that we can address.
Size of the team, names of founders, management roles and key personnel?
15 full time employees and 10 contractors, with 60 FTEs by year-end 2016.
Key management:
- Ravneet Bhandari, CEO
- Somnath Banerjee, CTO
- Erik Munoz, CMO
- Michael O’Connell, SVP of Business Development
- Lio Chen, VP of Operations
- Beatrice Robbins, VP of Product Management & Analytics
Funding arrangements?
Secured $5 million in seed funding from Highgate Ventures and Trilantic Partners.
Estimation of market size?
Total addressable market across our various target verticals of Hospitality, Gaming and Asset Management is in the $500MM-$1 B range
Competition?
Companies already established in the hotel industry space who deal with revenue management. Although we believe that our platform and products will significantly alter how the revenue management product category has been defined.
Revenue model and strategy for profitability?
Various product lines, SaaS / modular pricing, and a native mobile RMS with in-app monetization. Focus on Top 50 global hospitality markets, ready access to large clients through investors and management network.
What problem does the business solve?
Revenue management in travel is not using all available data sources and this results in poor recommendations and manual steps to reconcile fragmented data. Also, revenue strategy has become a “follow the leader” or “follow the competition” circular exercise.
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
We were engaged by a prominent and innovative NYC-based hospitality company to evaluate and benchmark their proprietary revenue management technology against all the other available systems in the market.
The need for a multi-dimensional, big data infrastructure, advanced machine learning algorithms, and an engaging UI/UX became instantly apparent. That led to the development of our first prototype and early results have validated our vision.
Why should people or companies use the business?
Our value proposition is straightforward: we provide the best data science, the largest big-data repository, a sophisticated next-gen machine learning platform, the best user experience, and more meaningful recommendations that will yield significantly greater results than any other technology available today.
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
Industry events, direct B2B evangelization, leverage huge investor/management network through direct sales, highly targeted digital and social marketing.
We believe that the results we generate will speak for themselves, and afford us the opportunity of creating thought leadership and gain credible mind share very quickly as we scale.
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
We believe we have a credible path to fast scalability, and anticipate revenues to be in the $40-50 MM range in three years. We recognize that we will be dealing with replacement sales cycles, but believe that we have enough greenfield opportunities across our target verticals.
What is wrong with the travel, tourism and hospitality industry that it requires a start up like yours to help it out?
We believe the industry has settled for mediocre results, and a copycat, or “follow the market”, mentality, because technology has simply not scaled in a non-linear manner to meet the needs of the highly complex operating environment.
What other technology company (in or outside of travel) would you consider yourselves most closely aligned to in terms of culture and style... and why?
We are building our own culture and don’t necessarily aspire to be “like” anyone else. We do draw inspiration from companies like Apple, because of their constant commitment to innovation and design.
AirBnB and Uber are others that come to mind for the manner in which they stuck to their core ethos and achieved scalability.
Which company would be the best fit to buy your startup?
At this stage, we are committed to building something great that will re-define the category of revenue management, and deliver the best results, period. Of course, we will continue to explore all strategic options as we scale.
Describe your start up in three words?
Innovative. Committed. Category-Killer.
LodgIQ has created a Vine to show its consumer-grade user interface:
Tnooz view:
LodgIQ impresses by having enough funding to match its ambition, plus a skilled team (some of its key execs are alumni of Nor1, the B2B hotel technology company, for instance).
But its sales teams will contend with many rivals, such as BookingSuite, Duetto Research, IDeaS, RateGain, Infor, Rainmaker, etc, whose revenue management products make overlapping or similar functionality claims. We'll be eager to see how well the company's sales teams convert demos into deals.