Baring Vostok invests $6 million traveltech platform Level.Travel
Level.Travel, a Russian traveltech platform for searching and booking tours online, announces that it has raised $6 million from Baring Vostok, an investor in the leading Russian IT companies Yandex, Ozon, 1C, Skyeng and others.
The funds will be used for the further development of the technological platform and business growth. One of the most promising development areas, is the development of the company’s own technology of dynamic bundling, which enables clients to instantly create package tours including a variety of options for flights and hotels. This will allow Level.Travel to offer tourists more vacation destinations and the ability to create a flexible and customized tours that are not limited to the options offered by legacy tour operators. In addition, the company will continue developing fintech products for greater flexibility and convenience in terms of booking and payment. It will also implement a marketing strategy to increase its market share by shifting its audience from offline to online.
As a result of the deal, Baring Vostok, as a financial investor, received a minority stake in Level.Travel. By agreement of the parties, the amount has not been disclosed. The company's founders, Dmitry Malyutin, Ellin Tolstov, Pavel Glushenkov and Evgeny Ginzburg, retain a majority stake. Guard Capital fund also continues to hold a stake in the company.
The company was the first in the market to create a real-time tour search technology that works based on the integration of the tour operators' systems with its own content database. The Level.Travel tour booking service launched on the basis of this technology enables tourists to choose and buy tours offered by all leading tour operators online without intermediaries. The entire booking process – the choice of resorts and hotels, comparison of flights and prices of tour operators, documents and payment – is carried out online: through the company’s website and mobile apps. Tourists can use different methods of payment: from prepayment and installment payment plans, payment with the help of cashback cards or loyalty programs. Level.Travel’s technological platform has been used to launch tour sales by Yandex, TripAdvisor, Kayak, Euroset, OneTwoTrip, Svyaznoy, Megafon and others.
Speaking about the company’s future plans, Dmitry Malyutin, CEO and co-founder of Level.Travel, said:
"The focus on digitalization of the massive travel market segment through technological development has provided us with double-digit business growth for several years. In the new post-pandemic reality, technology has become even more important in our market, and I'm excited that we can now invest even more in growth and strategic projects. We are ready to become the No. 1 player, and to do that, in addition to the best technology in the market, loyal tourists and an engaged team, we now have the backing of a strong, experienced investor specializing in the development of tech companies."
Maxim Loginov, a partner at Baring Vostok, commented on the deal:
"Baring Vostok, as a financial investor, now sees an excellent opportunity to invest in the traveltech market. Despite the fact that the pandemic and restrictive measures have had an impact on the travel market, we are confident in the significant growth of the traveltech segment in the medium to long term. According to Ipsos Comcon, 66% of Russians prefer to travel by tours. Of those, 80% are willing to choose tours online. The online share of the Russian travel market is only 7%, but the market is rapidly digitalizing. We are sure that Level.Travel, as the leader of this market with the most advanced technologies, will be at the forefront of the transformation and further growth of the market".
Level.Travel, the developer of a traveltech platform and an online tour search and purchase service, was founded in 2011. In 2016, it received investments from Guard Capital, whose portfolio companies include DocDoc and DeliveryClub.
Now more than 400,000 tourists regularly vacation with the help of Level.Travel. The company’s website and mobile applications offer tours from all the leading Russian tour operators, with departures from 62 cities throughout country. The company's turnover at the end of 2019 was RUB 6 billion. In 2020, as a result of the pandemic and the global crisis in the travel market, it was RUB 2 billion. Sales in the pre-crisis period from 2017 to 2019 doubled each year, with more than 40% of orders from the previous year repeated the following year, and the consumer loyalty index (NPS) remained consistently above 70%, with an average of 18% in the category. The average check from 2017 to 2020 increased by 33%, from RUB 67 thousand to RUB 90 thousand.
About Baring Vostok
Baring Vostok is a leading private equity fund focusing primarily on the Russian and CIS markets. Long-term investors in Baring Vostok include pension and university funds, sovereign wealth funds, as well as funds of funds from North America, Western Europe, Asia and the Middle East. Over its 27 years in the market, Baring Vostok funds have invested more than USD 3.7 billion in 87 projects in Russia, the CIS and other countries in the region. Its funds’ portfolio companies are first-class Russian companies with leading positions in Russia and abroad, including OZON, Familia, VkusVill, Papa John’s, Solofarm, Skyeng, Viasat and many others.