Confidence in the growth of the experiences segment is showing no signs of abating as Klook has announced $210 million in a Series F round.
Bessemer Venture Partners led the investment with participation from BPEA EQT, Atinum Investment and Golden Vision Capital. Southeast Asia corporate investment arms Krungsri Finnovate, Kasikorn Financial conglomerate and SMI SG Holdings were also involved as well as banking facilities from City, J.P. Morgan and HSBC.
Klook said that it has achieved overall profitability for the first time this year and annualized gross booking value of $3 billion as travel recovery began in 2023 for many Asian markets.
Ethan Lin, co-founder and CEO, said: “During the pandemic, we doubled down on our resources in merchant digitization and the expansion of our supply network, including car rentals and outdoor experiences. This positions us strongly to capture new travel trends coming out of the pandemic."
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The company has also been building up its app-first approach in a bid to acquire and retain customers it said, with more than 80% of its bookings coming through mobile. It claimed that customers acquired in 2023 were more than double that of 2019, adding that repeat customers contributed to more than half of total bookings.
"Leveraging strong business fundamentals that led to significant growth in revenue and profit this year, including a threefold increase in productivity (revenue per headcount), we are set for a new phase of sustainable expansion," Lin said.
Klook plans to devote the funds to three areas: product innovation, which will see it expand its city pass offering, scaling social and digital marketing through the Klook Kreator program unveiled earlier this year and innovation through artificial intelligence developments.
The company said its recent partnership with Google Cloud will see generative AI used across the platform for automated translations, content generation and a customer service chatbot.
Eric Gnock Fah, co-founder and chief operating officer, said: "We are pioneering a transformative era of travel, catering to a new generation of more digitally-savvy travelers with bigger and bolder appetites for unique experiences. Our goal is to empower travelers to explore the world effortlessly through the Klook app, a one-stop platform that seamlessly connects them to a comprehensive range of in-destination services, encompassing immersive experiences and convenient ground transportation."
A further tenet to Klook's strategy is to collaborate with investors in the region to boost growth and market share and take advantage of the burgeoning middle class in Southeast Asia.
In a recent interview with WebinTravel's Yeoh Siew Hoon, the founders spoke about the early days of the business and how they think about its future and the evolution of the market. At nine years old now, Klook's mission to bridge communities better with experiences hasn't changed according to Lin.
The potential for a listing on the public markets was also discussed with the founders saying they see it as "just another potential milestone" but remaining tight lipped about if and when it might happen.
Segment growth
The tours and activities segment has seen significant growth in the past year as post-pandemic consumers seek experiences beyond traditional vacations. Many predict the appetite will continue into 2024 and beyond as other travel suppliers such as hotels look to plug experiences into their offering.
We are pioneering a transformative era of travel, catering to a new generation of more digitally-savvy travelers with bigger and bolder appetites for unique experiences.
Erik Gnock Fah - Klook
Companies in the space including GetYourGuide and Tripadvisor-owned Viator have experienced significant growth and attracted attention from the investment community.
GetYourGuide announced $194 million in funding earlier this year, saying the investment would go towards global expansion and further AI development. The Germany-based company claimed at the time that its booking volumes in the first quarter of 2023 were close to four times the volume of the first quarter of 2019.
Viator, meanwhile, saw revenue in the third quarter of 2023 increase 41% to $245 million year-over-year, accounting for 46% of Tripadvisor’s total revenue of $533 million. Gross booking value for Viator for Q3 was $1.1 billion. Viator has said it will be profitable on a full-year basis in 2024.
At a recent Arival event, Sarah Dines, Viator's chief commercial officer said the company is seeing customers take longer and more expensive trips, spend more in-destination and cancel at much lower rates.
How the tours and activities segment shapes out in the next couple of years is up for discussion. Some believe a big event such as a public listing or merger and acquisition activity is on the cards. At The Phocuswright Conference, Arival co-founder and CEO Douglas Quinby questioned "why a really big event hasn't happened?" given how much expectation and excitement the segment is generating.
The response from the CEOs of Viator and GYG, who joined Quinby on Center Stage, is that the experiences segment isn't like others - it remains fragmented and despite the efforts of some of the large online travel players predominantly offline.
Tiqets founder and president Luuc Elzinga and Stephen Oddo, founder and president of Walks and Devour carried on the conversation in the PhocusWire studio. They touched on the potential for an exit, the influence of Google, what Airbnb's next move might be and the role of generative AI.
Watch the full discussion with PhocusWire's Linda Fox below.
The Phocuswright Conference 2023 Executive Interview: The elevation of experiences