As the travel industry continues its post-vaccine rebound, Hopper has just announced it closed on a $175 million Series G round led by GPI Capital. This fresh funding comes just five months after the popular travel app raised its $170 million Series F, and brings its total valuation to a reported $3.5 billion.
While the larger industry was among the hardest hit by the pandemic, Hopper was one of the few tech companies in the space to have actually thrived in the last year. The company’s revenue tripled in 2020, and its platform managed to exceed its pre-pandemic user levels. This year, Hopper says it is on track to grow its revenue by 330 percent, and it has already surpassed its pre-pandemic revenue peak from Q1 of 2020.
Much of this recent success is attributed to the line of fintech products Hopper released just a few months before the pandemic. These AI-powered tools allow for things like price freezing, flexible date planning and cross-airline rebooking for missed flights — features that give travelers more flexibility and control over their itineraries. The company also recently partnered with Capital One to launch the Hopper Cloud, which allows any travel provider (airlines, travel agencies, etc.) to integrate Hopper’s fintech services into their own system.
“People have realized that, while getting a great price is important, making sure that you have the right flexibility and the right company behind your trip is also really important,” Dakota Smith, Hopper’s chief strategy officer, told Built In in an interview last June. “I think that will be one lasting change from the pandemic for the travel industry.”
Of course, the elephant in the room here is the Delta variant, as well as all the other coronavirus variants that will inevitably follow. With COVID-19 cases surging again, will people continue to feel comfortable traveling? Hopper’s CEO and co-founder Fred Lalonde seems to think so. He recently told TechCrunch that the company has “not seen an incremental impact” on its domestic bookings, and added that the app has seen an increased demand for its flexible booking products in recent weeks.
The success of Hopper’s fintech products shows that travelers are willing to pay extra for the luxury of choice and flexibility, explained Lalonde in a statement, which could help “supercharge the travel industry’s recovery.” In fact, he estimates that, if all travel distribution channels offered the company’s fintech products, it would increase the total consumer spend for the sector by $200 billion annually.
This could create a very profitable emerging tech sector that was not lost on GPI Capital.
“Hopper has created a large market opportunity with unique fintech products for the travel industry that applies an entirely differentiated and attractive business model,” Khai Ha, a managing partner at the investment firm, said in a statement. “The company emerged from a challenging period for the industry, bolstering its technology capabilities, customer service and its opportunity set with a stronger, durable foundation. We are thrilled to be a partner in this category-defining story.”
Looking ahead, Hopper says much of this fresh funding will be used to grow its team, particularly in customer support roles. The company aims to hire 500 new employees in the coming months, and has more than 100 open tech positions available at its Boston headquarters.
