Travel booking app will accelerate international expansion and further AI efforts
MONTREAL and CAMBRIDGE, Mass., Oct. 3, 2018 /PRNewswire/ -- Hopper, the world's fastest growing travel booking app, today announced US $100 million (CA ~$128 million) in Series D financing led by OMERS Ventures. Existing investors Caisse de dépôt et placement du Québec (CDPQ), Accomplice, Brightspark Ventures, Investissement Québec, BDC Capital IT Venture Fund, and new investor Citi Ventures participated in the round, bringing the company's total funding to date to US $184 million (CA ~$235 million). The new funding will be used to expand Hopper's market presence globally and continue its AI development.
"Travel is a $1.3 trillion industry. Online travel is $662 billion, with mobile comprising $264 billion of that," said Frederic Lalonde, CEO and co-founder of Hopper. "As the world continues to shift from web to mobile -- and to apps in particular -- an estimated 70-90% of time spent online is actually taking place on mobile. Of that, 92% of all mobile time is spent in apps — and not mobile web. Hopper is in a unique position to become the go-to way to book travel."
As the leading mobile-only travel booking company, Hopper has distinguished itself in the travel industry with its unique conversational commerce model and powerful machine learning. The app enables travelers to save money and travel more by predicting future prices for flights and accommodations with 95% recommendation accuracy, offering personalized tips, and notifying travelers about price drops and deals.
In the past year, Hopper has scaled to over 30 million installs, expanded its product offering by rolling out its hotels feature to over 20 markets, and is on track to surpass $1 billion in sales. Travelers have planned over 75 million trips and each day add over 150,000 new trip watches (i.e. enable trip-specific alerts). As a result, 90% of Hopper's sales come directly from its conversation (push notifications). This is an opportunity completely unique to mobile and a trend that continues to grow as users delegate their travel shopping to the app. Most travel apps are deleted after one month; by contrast, over 50% of Hopper's sales come from repeat bookers, and users on average engage with the app every 4-5 days while planning a trip.
Hopper has seen significant international traction in 2018 and plans to accelerate that growth in key markets abroad, with 25% of ticket sales already originating outside of the United States. Early yet significant product improvements, such as the inclusion of 47 low-cost carriers in Europe, have led to pronounced growth in the region, with sales up 154% YoY. Australia, the first market targeted for international launch, has seen sales increase 290% YoY. International expansion priorities include language, currency, and pricing localization.
Today, 25% of Hopper's bookings are the result of AI, meaning users are booking trips they didn't explicitly search for but the app knew to suggest. Conversion rates on AI-based recommendation notifications are 2.6X higher than ones for which the users explicitly searched. In order to do this, the company has developed and trained an algorithm unlike any other in the travel industry. Hopper's unique environment (a closed ecosystem, 1:1 conversation with each user, users planning trips 30-60 days earlier on Hopper than on the web) has created an opportunity to utilize machine learning and AI to learn users' preferences on a much deeper level and help guide their purchasing decisions.
"Mobile travel is growing 20% year over year. By continuing to innovate on mobile and ultimately change the way consumers plan and book travel, we believe Hopper has a tremendous opportunity globally," said Damien Steel, Managing Partner at OMERS Ventures. "We're proud to continue supporting Hopper as the company further establishes itself as the leader in mobile travel booking."
"This reinvestment brings la Caisse's total stake in Hopper to over $75 million, which attests to our commitment to the long-term development of innovative companies with great potential," stated Mathieu Gauvin, Senior Vice-President, Québec at la Caisse. "Hopper is now one of the most downloaded mobile travel applications in the world, and it is well positioned to pursue its growth plan, particularly by developing new markets and continuing its AI development."
The company's funds will also fuel Hopper's hiring initiatives as it plans to double its headcount in the next year. In the last year, Hopper has grown to nearly 200 employees in Montreal, Cambridge, and various offices around the world.
Hopper is the smart way to plan and book travel on your phone. Combining trillions of data points and powerful machine learning, the app saves users time, money, and anxiety in their quest to book the perfect trip. Hopper makes it possible to save money and travel more, predicting future prices for flights and accommodations with 95% recommendation accuracy, offering personalized tips, and notifying users about price drops and exclusive deals. Visit www.hopper.com for more information and to download the free app.
About OMERS Ventures
OMERS Ventures is the venture capital investment arm of OMERS, one of Canada's largest pension funds with over $95 billion in net assets. OMERS Ventures is a multi-stage investor in growth-oriented, disruptive technology companies across North America. www.omersventures.com
About Caisse de dépôt et placement du Québec
Caisse de dépôt et placement du Québec (CDPQ) is a long-term institutional investor that manages funds primarily for public and parapublic pension and insurance plans. As of June 30, 2018, it held CA$308.3 billion in net assets. As one of Canada's leading institutional fund managers, CDPQ invests globally in major financial markets, private equity, infrastructure, real estate, and private debt. For more information, visit cdpq.com, follow us on Twitter @LaCDPQ or consult our Facebook or LinkedIn pages.