Filing expenses and booking travel are two of the biggest pain points for business travelers and CFOs alike. There’s a longstanding conflict of interest between what the employee wants and what saves a company money.
TravelBank, an app that combines booking, expenses and rewards, is trying to reconcile this misalignment in vision. By enabling companies to create predictive budgets and incentivizing employees to find cheaper alternatives, TravelBank is a refreshing alternative to incumbents like Expensify and Concur (SAP).
Since launching in October, TravelBank has partnered with 800 small and medium-size businesses across all industries. On Wednesday, the startup announced over $25 million in Series B funding led by DCM Ventures, bringing its total funding to more than $35 million.
The raise comes along with a new feature called auto rewards: When users book air travel, they can see which flights will give them the most rewards points.
Points can be used for personal travel, food and entertainment with TravelBank rewards partners including Uber, Lyft, and RedAwning. As of Wednesday, users can also cash out their TravelBank rewards points into an Amazon.com (AMZN) gift card.
Unlike most services that give travelers more reward points when they book expensive options, TravelBank gives travelers more points when they choose cheaper options, which saves money for companies.
CHANGING THE CULTURE OF BUSINESS TRAVEL
TravelBank CEO and co-founder Duke Chung acknowledges that business travelers have historically prioritized convenience over cost.
He noted that more than 90% of business air travel is determined by three factors: flying on their favorite airlines; the desire to travel during business hours (between 9 a.m. and 6 p.m.); and flying to and from a specific airport.
But, unfortunately, adhering to these criteria results in employees purchasing the most expensive flights out there.
“Companies are already expensing the highest quartile flights out there. So our idea is to actually reward travelers for choosing options that could be several hundred dollars cheaper,” Chung said.
“It is such a pain in the butt for a CFO to have predictable travel expenses and it’s actually very difficult for these large organizations to control expenses for employees’ travels. With TravelBank, the user wins, the company wins and TravelBank wins. I like the scheme,” DCM co-founder and general partner David Chao told Yahoo Finance.
Chao, who will receive one seat on the TravelBank board, said he was particularly intrigued by the company’s enterprise approach.
“The B-to-C space is a dog-eat-dog world right now. It’s very tough to create a new brand. And of course the airlines themselves are fiercely competing directly,” he said.
Prior to starting TravelBank, Chung was the founder of the customer service software company Parature, which he sold to Microsoft (MSFT) in 2014 for $100 million. While he was at Microsoft, he was able to see how inefficient and clunky existing expense systems like Concur and Expensify are for both managers and employees.
Chao said Chung’s background was instrumental in his decision to lead the latest round of funding.
“I knew that Duke and his team were going after the big game. They had a very successful acquisition and now they’re actually hungry to hit another home run,” he said.
Furthermore, Chao likes travel as a category, and was looking to expand DCM’s portfolio, which includes global travel companies eDreams in Europe and Tuniu in China.
“There is a huge opportunity in this industry and TravelBank is taking the lead, by not only modernizing the booking and expense process, but also offering companies a way to save money on their travel and entertainment spend overall,” Chao said.
While TravelBank has primarily focused on smaller companies, the $1.3 trillion business travel industry is ready for complete disruption — for practical reasons.
“CFOs typically don’t know the final travel expenses until the end of the quarter, but with TravelBank you can predict the approximate, realtime expense throughout the quarter. I think that will be a big deal for large companies,” said Chao.
Particularly for frequent business travelers, it would surely be a welcome change to actually get rewarded for their time away from home.
Melody Hahm is a writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Follow her on Twitter @melodyhahm.
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