Hopper is initiating a massive growth strategy fueled by a
$100 million Series D financing round.
The funding was led by Omers Ventures, with participation
from existing investors Caisse de depot et placement du Quebec, Accomplice,
Brightspark Ventures, Investissement Quebec, BDC Capital IT Venture Fund and
new investor Citi Ventures. It brings the company's total funding to date to
The mobile app combines data and artificial intelligence to
predict future prices for flights and accommodations, which can all be booked
in the app. The app has sold nearly $1 billion in bookings since it launched in
With the new funding, co-founder and CEO Fred Lalonde says
it will focus on expanding the app's presence globally, starting with Europe,
Australia and Latin America, developing its use of AI and doubling the size of
its workforce to about 400.
The app has been available in 120 countries around the world
since it launched, and today about 25% of its sales originate from outside
North America, but Lalonde says that growth has been organic. Now Hopper is
working to bring on more international carriers, including low-cost airlines,
to ensure the app has the lowest fares on all routes.
"We've been playing a strategy of getting all of our
inventory, all of the rates, all the last carriers, no matter how small or big
or off the global distribution systems, making sure we have a global, full
market view in order to become the best transactional platform in the world on
mobile," Lalonde says.
"The proceeds from this fundraising are about building
Hopper into a global mobile brand -- I would say the number one mobile travel
marketplace in the world. And when you look at where the trend is, I can see us
in the course of a year or two being more than 50% international in terms of
sales. That would not be crazy given that it's already become a quarter in a
short period of time."
Lalonde says this latest funding round was prompted in part
by the early success they have had in boosting the app's international
presence, with year-over-year growth between 100% and 300% in key markets in
Europe and Australia.
"We are now at 30 million installs," Lalonde says.
"I have a personal goal of getting us to 250 million installs in the next
three to five years."
Along with increasing inventory, the new funding will be
used to improve the digital experience for international users by adding
languages -- Hopper is currently only available in English -- and global
The new funding will also be used to accelerate development
of Hopper's use of AI and machine learning.
The company says one-quarter of the bookings done in the app
are the result of AI -- meaning they are trips suggested by the app but that
the user did not explicitly search.
"Our core advantage, why Hopper is growing so fast, why
we are able to compete against the giants -- Booking.com and Expedia and Ctrip --
is because of our data and AI."
As the app's database of historic prices continues to grow,
along with the addition of new product inventory and more users, Lalonde says
that AI will become even smarter and better able to guide purchasing decisions.
For the upcoming holiday season, Lalonde says it has "embarked
on a massive project" to tweak how the app's predictive engine functions
so it can provide better results for holiday travelers.
And new uses of the AI are in the works.
"The new frontier we are working on now is, What if it
was cross-category? What can we infer from your air shopping behavior to inform
your hotel purchase?" he says.
"Does the behavior in one part of the purchase
influence the other? And the answer is yes, absolutely, it's a very, very high
predictor. So as you are looking at air, we can figure out what you'll want in
lodging and not only give better recommendations but also different pricing."
Hopper added hotel price prediction and booking in October
2017, starting with New York and gradually rolling out in 20 markets around
The company says it currently has about 1,600 properties in
the app, but that number will soar to 100,000 worldwide by the end of 2018 and
to 200,000 by the end of 2019.
"Hotels is still tiny compared to air," Lalonde
"But I think we've found a really interesting model.
What we are finding is that selling long leads --not last-minute, what a
HotelTonight would be doing -- selling long leads over the mobile app is
The initial focus is creating an inventory of traditional
hotels, but Lalonde says it's not ruling out home-sharing. "Given that our
user base is primarily millennials, alternate accommodations is of interest to
In the future, Hopper may also add air-hotel packages since
data can be used to predict a user's lodging interests based on their air
queries and vice versa.
Lalonde says Hopper's unique position as a mobile-only app
product is part of what has driven high user engagement.
"Because it's your phone, because it's in your pocket,
because you have push notifications installed, you're talking about seeing that
user every four to five days," he says.
He says mobile has allowed the company to pull customers "out
of all existing brands. Every metasearch site, all the search sites, all of the
OTAs, we view as competitive."
"Once somebody has bought from Hopper there is a one
out of two chance we become the starting point for their travel journey,"
"They will not go back to Google to start. They may
price-check us on Google Flights or Google Hotel Finder, but Hopper has become
the place they start their travel intent. The only way we are able to pull that
off is because we are mobile-only."
As Hopper works to grow its customer base, Lalonde says it
may explore allowing users to input payment information such as credit card
numbers on the web, to serve customers that are more comfortable typing on a
laptop than on a phone.
"We are just out there to acquire the largest user base
and deliver the best possible marketplace to our users," he says.