Dakota Smith - Mon Nov 07 2022
Today, Hopper is announcing that it has secured a $96 million follow on investment from Capital One. Capital One previously led Hopper’s Series F round in March of 2021. Last year, Hopper and Capital One teamed up to launch Capital One Travel, a one-of-a-kind smarter travel booking experience with industry-leading cardholder benefits.
Following the success of Capital One Travel, Hopper and Capital One are announcing an extension to their partnership as a way to continue creating best-in-class, intuitive solutions that make all parts of the travel journey seamless for customers.
Capital One Travel offers customers elevated earn on travel bookings and unique features like price alerts, price drop protection, and the ability to cancel your flight for any reason. Since launch, Capital One Travel is driving travel bookings at record levels, outpacing both industry growth and pre-pandemic volumes and repeat usage of Capital One Travel continues to grow. Most recently, Capital One Travel announced Premier Collection, a curated selection of luxury hotels and resorts that offers Capital One Venture X cardholders a suite of premium benefits and elevated earn on every stay. The booking experience and technology behind Premier Collection is only the latest example of how Capital One is leveraging their partnership with Hopper to build best-in-class travel offerings for their customers.
“Capital One has invested heavily in our own tech journey to ensure we can be nimble and innovate on our platforms and experiences at scale. With Hopper, we have found a partner who can not only match that pace, but help us continue to challenge the status quo and take a differentiated approach to building a world class travel brand” said Matt Knise, Managing Vice President of U.S. Card at Capital One. “Through this strategic partnership, we’re well-positioned to adapt to a rapidly changing travel environment and create industry-leading solutions for our customers along their travel journey.”
“We are thrilled to be extending our partnership with Capital One to further the growth and expansion of Capital One Travel,” said Frederic Lalonde, CEO and Co-Founder of Hopper. “We look forward to continuing to deliver a game-changing travel booking experience that evolves to meet the next generation of customers' needs.”
Hopper’s Growth Fueled by Fintech
Over the past year, Hopper has become the fastest growing travel app in the U.S. The Hopper app has nearly 80 million downloads and continues to capture market share in North America. The company's market share of third-party air travel in the United States has increased to 11.2% (source: MIDT) and Hopper is now the #3 largest OTA in North America.Hopper is on track to sell $4.5 billion in travel and travel fintech this year across flights, hotels, homes and rental cars. Sales in the app are up 4-5x year-over-year and holding at that high level and revenue is pacing 25X over 2019. International users comprised less than 3% of sales last year but now comprise over 20% of sales and the app is quickly internationalizing.
Whether it’s protecting against pricing volatility or avoiding trip disruptions, Hopper’s proprietary suite of fintech products continues to delight customers and drive revenue growth. The company’s fintech offerings, such as Price Freeze and Flight Disruption Guarantee, represent about 40% of the company’s total app revenue, and it comprises 70% of Hopper’s total air booking revenue.
Hopper Cloud Expansion
Last year, Hopper launched Hopper Cloud, the company’s B2B initiative, which continues to be a strong source of growth for the company. Through this partnership program, any travel provider can integrate and seamlessly distribute Hopper’s fintech or travel agency content. Additionally, Hopper Cloud offers white-label travel portals for companies that aspire to sell travel with a differentiated consumer experience and offering. The Hopper Cloud business has also grown by 4x in the last 6 months alone and now comprises more than 40% of Hopper's business. Hopper Cloud is on track to make more this year than all of Hopper did in 2021. With a strong pipeline of airlines, hotels, and other travel partners eager to launch Hopper Cloud initiatives, the volume of sales from Hopper Cloud could surpass the Hopper app next year.
Building the First Travel Super App
With its world class marketplace and proprietary fintech offerings, Hopper continues to aspire to be the world’s best and most fun place to book travel. This year, the company shifted its growth strategy to put the majority of its marketing budget towards in-app activities and rewards and loyalty like Carrot Cash promotions, discounts and sales events. A focus for the Hopper app in the next year is to continue introducing new social commerce features to drive growth and support the company’s broader goal of becoming the first travel super app in North America.
Hopper has begun rolling out several social commerce features like referrals, share-to-earn, team buying, and daily gifts. Through these features, the more Hopper users launch the app, engage and share with friends, the more they can earn in Carrot Cash discounts that can be used towards future travel purchases. Over the past 12 months, $50 million has been redeemed by Hopper customers across Carrot Cash rewards, vouchers, and flash deals to help travelers save more. For context, that's larger than Hopper’s entire external marketing budget over the same period.
The funds will be used to accelerate the company’s growth across several fronts including fueling its new social commerce initiatives.