Last October, Carlson Wagonlit Travel (CWT), the corporate travel management giant, acquired WorldMate, a start-up a start-up that makes mobile trip manager apps, for a rumored $20 million.
This year WorldMate, headquartered in San Francisco, has boosted its company headcount to 38 — mostly by doubling its product development team, which is in Israel.
The hiring spree is on-going, and by December, the CWT subsidiary expects to have expanded its staff 40% since its acquisition.
Touch here for a bed, or a car
In the past few years, WorldMate has shifted its revenue mix away from in-app subscriptions, such as for premium services like WorldMate Gold, and toward earning commissions off of transactions, such as hotel bookings and car rentals.
The company says its commissions-driven business is growing rapidly.
WorldMate apps have been downloaded about 10 million times, but that number has only increased by about a half million downloads since November.
The number of travelers who manage at least one trip a year with WorldMate applications is between 12% and 22% of total registered users, varying by platform.
Extending the lead time of its bookings
WorldMate aims to extend the appeal of its smartphone apps beyond 11th-hour bookings. Until now, tiny keyboards and clunky interfaces have tended to dissuade all but the most determined consumers from making bookings via their smartphone.
Yet in the past year about 39% of the bookings made via WorldMate’s apps on smartphones were for reservations more than a week in advance. (Yes, that statistic is for smartphones, and not for tablets — with their larger screen sizes.)
Some of the gain in advance bookings — a few percentage points since last October — may be partly explained by the company having enhanced the user experience of its apps.
An April update to the WorldMate itinerary-management app for iOS allows users to move each detail of a flight confirmation into the airlines’ mobile flight check-in forms with the flick of a finger, which requires less typing on a device’s tiny keyboard. (See video, below.)
Increased consumer adoption of mobile devices also plays a part in travelers’ willingness to book trips in advance on their smartphones.
A popular API
WorldMate says it has registered 500 developers for access to its API, and that many of these coders have built products off of it for a variety of brands and start-ups, such as TripCase and FlightView.
The company says it has the only API that enables a third-party developer to launch a fully independent and privately branded service. It requires only a travel confirmation e-mail address from the end user in a query to return a structured itinerary.
For instance, TripIt, a rival itinerary-management service, has an API that requires end users to create TripIt accounts in order to get back structured itineraries, while WorldMate’s API doesn’t require the independent developer’s end users to create WorldMate accounts.
The company charges for white label/API licensing, and says that segments represents a growing revenue stream.
Supporting CWT’s managed travel
CWT processes 16 million transactions a year. It will take time before WorldMate services most of that volume.
In spring 2013, the subsidiary launched its first mobile solution for the travel manager: the CWT To Go app, which replaced the travel manager’s clunky predecessor app.
CWT-booked itineraries automatically integrate and update on the app, and users can manually add non-CWT itineraries. However WorldMate apps don’t automatically ingest CWT itineraries, and there are no plans “in the near future” to add that functionality.
CEO interview
Tnooz recently spoke about WorldMate’s upcoming projects and growth expectations with CEO Amir Kirshenboim by phone from his office in Tel Aviv:
What’s been the biggest change, post-acquisition?
It’s the nature of most start-ups to just be tactical to survive. The acquisition lets us be strategic instead, choosing only the right projects and the right partners for our growth, while at the same time servicing the world's biggest travel management company.
The agenda was set clearly from CWT from the start: Keep building the WorldMate brand, keep innovating, keep fresh and agile, keep winning awards and significant partnerships, and at same time help CWT serve its end users better.
As an itinerary-management app, we have a lot of context about the traveler and their needs, and our biggest goal on the transaction side is to push more relevant offers at the right time.
Is it difficult to go after two different sectors with different products?
I would definitely advise entrepreneurs who can avoid doing that to avoid doing that.
But the travel world is fragmented, and having to serve multiple products and markets is a burden that many travel businesses face. Our business is no different from other travel players in this regard.
Will there someday be an all-purpose itinerary-management app, or will travelers always have to have one app for business travel and another for leisure and another for managing frequent flier miles, and so on?
The consumer just wants one app. In an ideal world, there would be only one app. But the industry is too fragmented to allow for a single multi-purpose app, at least for the next couple of years.
Hasn’t arch rival itinerary-management app TripIt had more success than WorldMate?
Yes, in the consumer side, in several markets. Yet overall, we’re doing better in many ways. For example, the in-store ratings of our apps, based on a significant number of reviews, are higher than the ratings for the apps of our main competitors.
Regarding our white label and distribution business, I don't think there's anyone else doing what WorldMate is doing, such as what we offer for American Express and Blackberry.
How do you ensure that your team continues to pioneer and produce a steady stream of innovative products?
We’re very selective in our hiring for our R&D team. We also try to instill a sense of ownership in the product.
We have a “20% time” program that allows employees to work on side projects and receive resources to develop their ideas. Our latest online check-in feature came to life as a 20% time project by one of our developers.
Post-acquisition life
Both WorldMate and TripIt appear to be struggling to retain their start-up mentality and rapid pace of product development after having been acquired by larger, decades-old companies.
TripIt hasn’t launched much in the way of new products since it became the subsidiary of a decades-old travel-and-expenses-management company, Concur, other than for a seat-availability-tracking tool on the Pro version of TripIt's app and a tool for sharing itineraries with a group for the main app.
Likewise, the CWT subsidiary will need to speed up its metabolism for product iteration if it wants to avoid developing a case of acquiree’s remorse.
WorldMate’s hiring spree for product developers suggests that it is digging in for trench warfare against its main rival in the next couple of years.
Related post:
Product test: WorldMate vs. TripIt vs. TripCase