For the second time in two years, the fintech Montreal-based Hopper – whose application allows in particular to book plane tickets at the lowest price – has just obtained a hundred million US dollars from the American financial institution Capital One.
Posted at 3:47 p.m.
Hopper’s direction indicates to The Press that this direct investment yields a higher business valuation than that obtained in the previously completed financing round which valued Hopper at US$5 billion.
Hopper’s management says it secured a $96 million “follow-on investment” from Capital One. Capital One injected just over US$100 million into the company in January last year.
Hopper and Capital One had teamed up last year to launch Capital One Travel, a travel booking experience offering benefits for cardholders of the American financial institution. Capital One Travel offers its customers features like price alerts, price drop protection and the ability to cancel their flight for any reason.
“It’s a big commitment from Capital One,” said Dakota Smith, co-founder and president of Hopper, in an interview with The Press. “We take this new investment from Capital One as a strong signal that we are building something mutually beneficial together. »
The two companies want to continue their partnership to create new solutions aimed at “simplifying” the lives of customers at “all stages of their journeys”.
The capital raised will be used in particular to further develop the company’s B2B initiative through which a supplier (hotel, airline, credit card issuer, etc.) can generate revenue by integrating Hopper’s offer.
PHOTO PROVIDED BY HOPPER
Hopper President and Co-Founder Dakota Smith
This B2B initiative launched last year is called Hopper Cloud and represents more than 40% of Hopper’s business, according to Dakota Smith. “That’s probably the most relevant for Capital One, which is a major customer. »
The funds will also be used to fuel new social commerce initiatives. Revenue sharing, team buying, and daily giveaways are examples of the app’s social commerce features.
“The goal is to build a fun and engaging app for Gen Z with the hope that Hopper will grow from a popular app for young people to become the world’s first comprehensive travel app for Gen Z,” says Dakota Smith.
He adds that expanding into international markets is another priority the company wants to invest in.
A sign that the app would gain popularity internationally, Dakota Smith says users from other countries accounted for less than 3% of sales last year, but now account for more than 20% of sales.
“We’re aiming for that number to jump to 40 or even 50% within 18 to 24 months,” he says.
Hopper claims to be the fastest growing travel app in the United States. Management says its app has been downloaded more than 80 million times and the company’s market share in third-party air travel in the United States exceeds 10%.
Hopper presents itself as the third online travel agency in North America, behind Booking and Expedia.
Executives estimate that Hopper is on track to sell $4.5 billion in travel and travel fintech this year (flights, hotels, homes and rental cars combined).
Dakota Smith says the company’s fintech offerings, like price freezes and flight disruption guarantees, account for about 40% of the app’s total revenue and 70% of revenue Hopper’s total flight bookings.
Founded in 2007, Hopper counts Investissement Québec, the Caisse de depot et placement du Québec and OMERS (the Ontario Municipal Employees Retirement Fund) among its investors.
The management does not reveal its turnover, but maintains that its revenues are growing strongly. Sales in the app have increased four to five times annually and remain at that level, according to Hopper. The workforce of the company exceeds 1500 employees.