Deal focus: GPs back Klook’s tailored travel offering

From Priceline to Expedia to Ctrip, consumers are well-covered when it comes to booking flights and hotels online. The opposite is true of travel activities – online penetration is just 15% compared to 61% for flights and hotels – and this is what attracted the founders of Hong Kong-headquartered Klook.

Less than three years after its establishment, the company has raised nearly $100 million, following a $60 million Series C round of funding led by Sequoia Capital China, Goldman Sachs, and Matrix Partners. This came just over six months after Sequoia took the lead in a Series B round worth $30 million.

Klook needs the capital to support its expansion ambitions. The company has a portfolio of 30,000 travel activities and services covering over 120 destinations. It currently makes more than a million bookings per month on behalf of users – 40% from Greater China, 30% from Southeast Asia, 20% from Japan and Korea, and 10% from other markets. There are 13 offices across Asia, and the immediate priority is to establish a presence in the US and Europe.

“We want to build up travel activities supply to meet the growing demand of Asian travelers going long-haul to North America, Europe and Australia,” says Eric Gnock Fah, co-founder and president of Klook. “We also want to market and introduce Klook’s Asian destinations to visitors from North America, Europe and Australia. We expect to see growing demand with major international events attracting travelers worldwide to Asia, including 2018 Winter Olympic held in Korea and 2020 Tokyo Olympics.”

Klook’s edge is its mobile platform, with more than 70% of bookings being made via smart phone. This reflects both the spontaneity of travelers and the range of activities – or  “in-destination services” – that are available. Rather than sit down at a computer and map out an itinerary before departure, users are planning on the go, whether they are signing up for a diving trip or booking an airport shuttle.

The major challenge when establishing the company was dealing with the industry fragmentation it is intended to help address. The travel activities space is highly segmented and so putting together an attractive product offering involves communicating with a wide array of suppliers. Klook also had to make this work across multiple geographies, balancing the need for a centralized ecosystem with a degree of local autonomy.

It is a challenge that remains when expanding the service into new markets, and Gnock Fah identifies hiring people as the biggest impediment to growth. However, getting the global-local balance right does enable a level of differentiation that other start-ups in the space – most of which focus on specific local markets – would struggle to replicate.

“We’ve been able to quickly scale the business across many geographies and really capitalize on global network effects, which is a true barrier to entry in the travel space,” Gnock Fah adds. 

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• Topics
• Greater China
• Expansion
• Consumer
• Technology
• Hong Kong (China)
• TMT
• Goldman Sachs
• Sequoia Capital
• Matrix Partners