Sydney-founded travel startup Seatfrog has raised $8 million in a Series A round led by European venture capital firm Octopus Ventures, with participation from existing backers including HOWZAT Partners.
With the idea having come to cofounders Iain Griffin, Ben Ient and Dirk Stewart in 2014 and the system launched in 2016 with $1.2 million in seed funding, Seatfrog allows travellers to bid auction-style on seat upgrades via its app. Customers can also buy an upgrade instantly.
The company last September signed up Virgin Trains, its first travel partner, to bring the service to train travellers in the United Kingdom.
The scope for the business is significant: according to the startup’s research, more than 37 million premium seats across 30 global airlines and 480 million seats across seven European rail providers alone travel empty each year, representing tens of billions of dollars in value.
As it looks to capture this market, the fresh funding will go towards growing the Seatfrog team across its Sydney and London offices, as well as further product development.
Griffin, CEO of Seatfrog, said, “Seatfrog’s technology brings a mobile solution to market designed for the passengers of today. We enable the travel industry to move much faster and evolve their ancillary strategies through intelligent use of real time data, giving their passengers’ an intuitive, mobile-first experience that fits with their busy lives.”
Luke Hakes, partner at Octopus Ventures and the newest addition to the Seatfrog board, said the firm feels the startup has an opportunity to “make a fundamental difference” to the way consumers approach “the challenges” of travelling.
“Having seen the impact of dynamic revenue management systems within hotels and airlines, we feel there is a very interesting opportunity in applying this approach to the multi-billion dollar train travel industry,” he said.
“Seatfrog is exactly the kind of forward-thinking technology with a powerful brand, that we want to invest in. Octopus Ventures looks forward to being part of Seatfrog’s journey and playing a role in supporting the team and taking the business to new heights across many geographies.”
The startup reported that it is growing 130 percent month on month, with user conversion rates at 56 percent. Meanwhile, it stated that its clients have increased revenues by over 100 percent.
It is currently in discussions with a number of airlines.
Image: Iain Griffin. Source: Supplied.