For many years, a key incubator for startups worldwide has been the Plug and Play Tech Center in Sunnyvale, Calif.
Founded in 2006 by Saeed Amidi, Plug and Play is a matchmaker for early-stage startups looking not only for funding but also for corporate introductions for licensing, piloting, and co-invest with established companies. The organization has also invested small amounts in more than 450 startups, including about a dozen travel-related companies.
In October 2015 Plug and Play announced its a travel practice, launching an industry-specific accelerator program. It has since helped travel startups like FLYR Labs, LoungeBuddy, Nor1, BookingPal, and Mozio — among others.
Its first batch of startups in travel has its Demo Day on June 24 in Sunnyvale.
Its goal is to have about two dozen corporations involved by year-end. So far, it has signed partners like Lufthansa (see announcement), Turkish Airlines (see announcement), and Carlson Wagonlit (see announcement).
Ultimately Plug and Play hopes to invest in about 20 or 30 travel startups a year.
To learn more, Tnooz recently spoke with Amir Amidi, managing partner, travel and hospitality. He said:
“Even though our venture arm focuses on very early stage opportunities for investment opportunities, for our accelerator program, we're stage-agnostic. We're dealing with companies that have raised in excess of $10 to $20 million who are just looking to scale and want to get deals done with the airlines or hotels or OTA's or GDS’.”
Another company Plug and Play has worked with is Beyond Pricing, which basically has a platform for setting up pricing optimization models for vacation rentals.
To choose startups, Plug and Play vets a list of hundreds. It picks about 30, and has those pitch to its corporate partners. Soon after, Plug and Play admits between 15 to 20 to its three-month accelerator program.
What typically comes out of the program is either licensing deals or pilot projects, though it could also be invetments or partnerships. Says Amidi:
"Corporations may have their internal efforts going on to explore the startup space, but they look to us for additional deal flow and partners, if you will."
JetBlue Ventures, for example, has its own team meeting and vetting startups. But Amidi says its team has worked with Plug and Play, who has made about 6 introductions as possible strategic investments.
The introductions ended up in JetBlue Ventures committing to two investment opportunities, one of which was Flyr Labs. Amidi adds:
“I would say the biggest value that we bring for entrepreneurs is in business development with huge corporations. A travel startup might take six months to get in front of the right person at, say, a giant airline like Lufthansa. We can cut down on that time-consuming effort for startups.
What makes Plug and Play stand out from other Silicon Valley accelerators is that we don't do exclusive deals with with any airlines or hotels or other travel suppliers.... ”
For example, Plug and Play recently became involved with Springshot, a San Francisco startup, which has built a employee-centric mobile interface that helps with the collaboration of tasks. Airlines like Delta and some hotel chains, plus some non-travel companies, are users of its mobile-first enterprise solution.
Springshot is raising its Series B, having been a part of Plug and Play’s first batch of its travel accelerator program. Amidi says Plug and Play made 5 introductions for it, and 3 out of the 5 introductions turned into "serious conversations."
Plug and Play investments vary, but pitching in $50,000 in a round is typical. Its investment criteria is complex, but Amidi noted one aspect:
“I would say we're really laser-focused on understanding who the entrepreneurs are before backing them. How much do they really know about the travel industry? We try to avoid people who are new to the industry.”
(Demo Day info.)
Related from Tnooz:
FLYR, a fare prediction startup, adds a B2B play for TMCs and airlines
Beyond Pricing seeks to boost revenue for property rentals
BookingPal takes $5 million from Thayer and Amadeus for vacation rental distribution push
LoungeBuddy kicks back with $3 million Series A to expand global lounge access
Mozio, the ground transport aggregator, aims to give TMCs a lift