One of the many interesting deals which took place this year was Expedia Inc's purchase of SilverRail, if only because it brought rail tech out of the shadows and into the OTA mainstream.
SilverRail is, give or take, a B2B business which Expedia is likely looking at using as a way to sell more rail to consumers. But while rail is "bigger" than air on most metrics, the complexities behind the scenes have been a historical headwind (if you pardon the use of an aviation-based metaphor) for consumer-facing rail startups.
Over the past few years rail tech providers - such as SilverRail - have embraced the API economy and opened up the rail back-end, at the same time as rail operators themselves have upped their tech game and made their inventory available to third parties.
Consumer-facing businesses such as voyages-sncf.com, trainline, Rome2Rio, Loco2 and Seatfrog among others have technology-based products and features can give their more glamorous air, OTA and meta rivals a run for their money.
Save A Train is a startup taking advantage of the opening up of rail tech. It has a simple proposition - giving rail passengers the chance to rebook a seat if the price they originally paid drops. Before the Q&A with founder and CEO Udi Sharir, here's a short introductory video.
What problem does your business solve?
Have you ever booked a train ticket only to see that the fare dropped soon after you made your purchase?
One of Save A Train's key missions is to improve the passengers experience and transforming them from simple train tickets buyers into smart travelers, thereby offering a value proposition like in other travel and hospitality sectors
We make it simple and friendly for you to book your train ticket. If your ticket’s price drops, we let you know and help you cancel the ticket and re-buy it at a cheaper price.
Other than that, we have multiple payment options (even Bitcoin!) so you can pay us as you wish, and our website has more than 10 languages (English, Dutch, Italian, German French and many more)
Names of founders, their management roles, and number of full-time paid staff?
Udi Sharir, Co founder / CEO
Avi Sharir Co-founder / Chairman
6 employees mostly located in Israel.
Funding arrangements?
We have been seed funded and looking for the next round of €2-2.5 million.
Revenue model?
We are a certified agent of some of the biggest rail operators in Europe. We get commission from the operators for each sale.
Additionally, we plan to take commissions on the savings of our users
And we have B2B products in the pipelines such as yield management systems for rail operators
Why do you think the pain point you’re solving is painful enough that customers are willing to pay for your solution?
We offer our users easy and intuitive platform to use when buying a train ticket, and unlike other online travel agencies we don’t charge booking fees so basically our users do not pay for our solution.
When it comes to saving money on a train ticket - Save a Train and its users simply share the profit: our users get a refund ( i.e pay less than they originally paid) and in return we get small commission for it. A win- win solution.
External validation? (Examples: The incubators/accelerators you have been accepted to, the mentors who are advising you, the number of customers you’ve signed, the marketing partner deals you’ve made, the skills/connections of your founders, etc.)
We have signed partnerships agreements with TrenItalia and NS International and by the end of this year we will offer the inventory of major rail operators in Europe. We were chosen out of hundreds of startups to participate as finalist in the battleground competition at Phocuswright's European conference in Amsterdam and in the Visa 2020 competition in Copenhagen.
Our European director is the distinguished Rene De Groot, ex Eurail CEO.
Tnooz take:
The fragmented nature of rail distribution is a double-edged sword - it means that there are opportunities for nifty startups to carve out a niche but it also means that there are opportunities for ten-ton gorillas to flex their financial muscles and rein in that fragmentation.
The scale of the rail market is another double-edged sword - it means that the pie is theoretically big enough for everyone to have a chance but it also means that a business which can leverage economies of scale to capture the huge volumes can get by on razor-thin margins which might put others out of business.
Save a Train appears to have a straightforward message which should resonate with cost-conscious consumers, depending on the value of the savings that it can deliver. As it signs more partnerships with other rail operators it will become more useful and have a wider appeal. It has made sure that its payments engine is in place from the outset which shows ambition and confidence, and integrating Bitcoin payments is a sign that it thinking outside the boxcar.