German online travel startup GetYourGuide raised $194 million from investors, hoping to capitalize on a bump in demand for travel services in the summer, further an expansion into the U.S., and invest in large language models and other artificial intelligence tools.
The Berlin-based company said Thursday it had raised the funding through a mix of equity and debt, with $85 million of equity investment being led by U.S. asset management firm Blue Pool Capital.
The investment values the company at nearly $2 billion, up from GetYourGuide’s last publicly-disclosed valuation of $1.4 billion, according to a person familiar with the matter. Existing investors KKR and Temasek invested again in this round.
The debt portion of the deal was led by UniCredit and also backed by BNP Paribas, Citibank and KfW. Total investment in GetYourGuide, including both equity and debt, now stands at just over $1 billion.
GetYourGuide’s product differs from those offered by some other major players in the online travel space. Rather than advertise hotels, flights and other forms of transportation, GetYourGuide sells its users experiences and things to do in unexplored places.
These experiences are offered through third-party suppliers on its platform, with GetYourGuide taking a commission on each booking.
The company has seen a massive jump in demand for its platform with travel returning back to normal following the ending of Covid-19 restrictions and the resumption of normal cross-border transportation.
Johannes Reck, the CEO and co-founder of GetYourGuide, said the company had seen its revenues erased during the early days of the pandemic — for multiple consecutive quarters the company made no revenue whatsoever, he said.
“We were severely depressed in the pandemic,” Reck told CNBC. “The travel industry was very hard hit within the travel industry. GetYourGuide was probably one of the worst affected. Experiences were shut down. People didn’t go out.”
“There were some greenshoots in 2021 with the reopening of the U.S. but the real rebound only started when omicron turned out to be a more benign variant and people started to resume traveling in Easter of 2022 and then we had an exploding business on our hands,” he said.
GetYourGuide saw a doubling of its sales volumes in 2022 and a quadrupling in the first quarter of 2023 compared to 2019, Reck said, citing a pre-pandemic benchmark due to 2020 and 2021 being markedly lower in terms of activity.
To offset the decline in physical experiences, GetYourGuide started offering users virtual tours and other experiences. More recently, it began offering its own exclusive branded experiences called “Originals.”
They include the ability to turn on the lights of the Sistine Chapel in the Apostolic Palace, the pope’s official residence in Vatican City, and visit the Museum of Modern Art in New York an hour before regular opening hours.
Travel experiences is a market Reck believes is worth $300 billion today, while he thinks the total addressable market for experiences more generally could be worth $1.5 trillion.
GetYourGuide will use the fresh funds to expand its operations in the U.S., which has been a huge source of growth for the company over the past year. The company also intends to up its investment in AI and other product development, with the use of large language models or LLMs being a key focus.
LLMs are algorithms trained on vast amounts of data that learn how to recognize, summarize and generate text and other types of content. They power so-called generative AI systems, which allow users to generate new content by entering certain prompts.
GetYourGuide says it is already integrating LLMs into its business to automate the generation of descriptions of experiences such as local pizza and pasta making classes, and riverboat cruises on the Seine in Paris.
LLMs can also be helpful for allowing people to discover new areas and find experiences with enhanced personalization of recommendations, Reck said. Google is rapidly advancing its work in AI amid worries about the threat of LLMs to its dominance in online search.