[Corrected 3/26/19, 9:52 am. See below.] Business travel software startup Lola is keeping its foot on the gas.
The Boston-based company is doubling its headcount—another 60 employees by the end of the year, mostly in sales and engineering—to keep up in the race to dominate the $1.6 trillion global travel market.
Lola, started in 2016 by Kayak co-founder Paul English, is fueling the growth with a new $37 million funding round announced today from existing investors General Catalyst and Accel. Previous investors—CRV, Tenaya Capital, and Alphabet’s GV—joined in the round. The cash puts the total invested in Lola at $81.7 million. [An earlier version of this paragraph mistakenly listed Kayak’s co-founder as Mike English. We regret the error.]
Lola CEO Mike Volpe, former HubSpot (NYSE: [[ticker:HUBS]]) marketing chief, says the company’s investors urged him to raise the new money.
“As we started to gain traction and grow, the investors leaned in and said maybe you should take more capital to scale business,” Volpe tells Xconomy.
Lola has also touted its relative growth numbers from last year that, it says, show a 432 percent increase in bookings and a 786 percent increase in revenue compared with the prior year—though it doesn’t disclose absolute figures.
Lola launched with the vision of being a mobile travel booking and management service for all, and it recently narrowed its focus to the business traveler. In November, Lola signed a deal with American Express Global Business Travel (NYSE: [[ticker:APX]]), becoming the credit-card company’s preferred travel platform for small and medium businesses.
“The focus on B2B corporate travel has been the thing that has driven our success. It’s a gigantic market … and the vast majority is from small- and medium-sized companies and it’s not managed at all,” Volpe says, adding that in many businesses, compliance and finance teams want the visibility into travel spending that his company can deliver. Lola is for the business traveler who is used to going to Kayak, or other consumer-oriented online travel services, for booking, he says. “It’s a huge market, wide open.”
Lola’s application boasts a simpler way to book and report business travel than the services of competing apps. The Lola app is supported by machine learning tools, the startup says.
Volpe says the biggest challenge Lola faces is how to expand rapidly while keeping its eye on the ball.
“The biggest thing I worry about is we are entering the phase now where all the problems we have are related to growth,” he says. “The amount of time we are all spending on hiring is significant too. You can easily lose focus on the day-to-day.”
Worries about a losing U.S. or global economy—and the hit that would put on companies’ travel budgets—isn’t high on the list. In fact, Volpe says those pullbacks in spending can lead to more users as enterprises need reporting and management systems like Lola’s to keep a closer eye on every penny spent.
He compares it to his experience at HubSpot during the 2008 financial crisis, when they expected slimmer customer marketing budgets to slam their revenues, but were surprised by how many companies picked up the Hubspot marketing tools to better manage the few dollars they were still spending.
Lola may benefit from the same customer behavior, Volpe says.
“There’s a part of our business, with how much people travel, that’s related to the economy,” he says, “but if you look for the need for a solution, companies are more worried about their expenses.”
