“COVID-19 was the worst crisis in travel history… [But] in the last eight months, we’ve signed on $100 million worth of travel volume and we’ve won customers against the biggest travel agencies in the world,” Ross Fastuca told The Australian Financial Review.
“We see ourselves as the company with the ability to scale as the industry scales back up. Since buying it back, it’s become a true marketplace for corporate travel.
“This is the start of our growth story. We’re not a traditional travel agency. Companies know they can jump on Locomote and everything they need is there. We’re connecting the best content and service providers around the world.”
The platform connects companies to travel agents and suppliers across the world, and provides businesses with one platform to manage bookings, approvals and duty of care requirements.
While COVID-19 has drastically reduced business travel, and the Locomote co-founders expect levels to stabilize around 30 per cent down on pre-pandemic levels, in some ways it’s been a tailwind for the company.
During periods where no staff are traveling, businesses have been more willing to change their systems and switch to digital platforms such as Locomote, Ross said.
“That was the hypothesis David and I wanted to test when we first bought the company back,” he said. “But 100 per cent there were nerves. We predict there will still be disruption for the next few years in travel. We’re not predicting a bounce back until 2024-25 and that will be a different normal.”
Now, Locomote has raised $4 million from wealth management firm Escala, despite corporate travel levels remaining depressed and forecasts of a long-term structural decline.
The raise was completed in only 27 days, at a valuation of $30 million.
“[Building Locomote the first time] there were two major lessons. Make sure you raise enough money, but also make sure you retain control of everything without too much governance over what you’re doing,” Ross said.
Escala has also backed fintech Moula, hearing solutions company Hemideina and buy now pay later player Payright.
”Escala Partners, through its direct investment group, selected Locomote … because of Locomote’s entrepreneurial alignment with our client base, many of whom are themselves successful entrepreneurs,” Escala chief product officer George Nassios said.
The company has signed up brands such as Bondi Sands, Openpay and Culture Amp to its platform. The co-founders have big plans for the decade-old company, wanting to hit $500 million of travel volume within three years.
Eventually, they hope to go public. “While most are doing their best to survive in a tough market, we are investing and winning lots of customers. We’re primed for the inevitable return of the new business travel era,” David said.