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Russian online travel agency Travelata has obtained $5 million (3,84 million euro) in new funding from Polish investment firm MCI and Czech OTA Invia, company CEO and co-founder Alex Zaretsky tells us. We have already written about them last December when MCI facilitated a previous investment by Invia in the Russian OTA. Zaretsky did not wish to provide financial figures such as the number of customers they have or the stake that Invia and MCI will receive, but would tell us that previous investment in the company includes $500,000 (384,000 euro) by Invia and Altair Capital in November 2012 and a small amount (less than $50,000/38,400 euro) from angel investor Bas Godska back in 2011. Zaretsky tells me that the newly-obtained funding will be devoted towards expanding marketing efforts, increasing call-center capacity, investing in their website, and attempting to increase their market-share.
We didn’t say much about Travelata as a service in our previous post, so I thought that we would take the time to do it now. More specifically, I wanted to know what sets Travelata apart from Russian competitors in the OTA market. Zaretsky told me that his company aspires to become a Russian “Amazon for packaged-tour deals” and that advantages include their selection of offerings (more than 120 tour operators on their website), a lowest-price guarantee, and convenient customer service for online shopping.
In terms of competition, they are up against 3 types of services: offline travel agencies, tour operators, and other startups. With regards to offline agencies, Zaretsky believes that his company has an advantage in the ease and the customer support associated with online shopping and that his company offers a guarantee against tour bankruptcy (i.e., the unique value proposition is offering replacement tours in the event that they sell a tour and the operator then goes bankrupt). Zaretsky says that they consider onine tour operators to be both partners and competitors, in a sense. On one hand, they are the ones who offer the tours. On the other, they rely on their own online marketing, where the companies clash. Travelata has an advantage in better allocation of marketing funds, better prices because Zaretsky argues that tour operators push their own product and Travelata attempts to offer the best deal from all available tour operators, and a more convenient shopping experience because he believes that tour operators are primarily B2B companies, but they attempt (and struggle) to be simultaneously B2B and B2C operations. Finally, according to Zaretsky, his company holds the upper hand over startup competitors because Travelata has strong financial support from MCI and Invia and benefits from the business advice that they receive as a result of their partnership with Invia.
As we have noted before, MCI not only invests in a number of companies, but also acts as one of the sponsors of this site. We have written about them on a number of occasions, most recently when they announced their financial results for Q1 2013, when they acquired a stake in Turkish IT distributor Indeks Bilgisayar, and when they announced their financial results for 2012. For a really in-depth look at what they’re about, be sure to check out Natasha’s introductory post on them from this past March.
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vita at goaleurope dot com