Artificial Intelligence-powered travel booking app Hopper has announced a $100 million Series D funding round.
The latest round has been led by OMERS Ventures. Existing investors Caisse de dépôt et placement du Québec (CDPQ), Accomplice, Brightspark Ventures, Investissement Québec, BDC Capital IT Venture Fund, and new investor Citi Ventures also participated in the round.
The latest funding means the Montreal-based firm has raised $184 million to date. It said new funding will be used to expand Hopper’s market presence globally and continue its AI development.
Frederic Lalonde, chief executive and co-founder of Hopper, said: “Travel is a $1.3 trillion industry.
“Online travel is $662 billion, with mobile comprising $264 billion of that. As the world continues to shift from web to mobile, and to apps in particular, an estimated 70% to 90% of time spent online is actually taking place on mobile.
“Of that, 92% of all mobile time is spent in apps — and not mobile web. Hopper is in a unique position to become the go-to way to book travel.”
Damien Steel, managing partner at OMERS Ventures, said: “Mobile travel is growing 20% year over year.
“By continuing to innovate on mobile and ultimately change the way consumers plan and book travel, we believe Hopper has a tremendous opportunity globally.
“We’re proud to continue supporting Hopper as the company further establishes itself as the leader in mobile travel booking.”
Mathieu Gauvin, senior vice-president at Québec at la Caisse, added: “This reinvestment brings la Caisse’s total stake in Hopper to over $75 million, which attests to our commitment to the long-term development of innovative companies with great potential.
“Hopper is now one of the most downloaded mobile travel applications in the world, and it is well positioned to pursue its growth plan, particularly by developing new markets and continuing its AI development.”
The Hopper app enables travellers to save money and travel more by predicting future prices for flights and accommodation.
It claims a 95% recommendation accuracy and says this allows it to offer personalised tips, and notifications to travellers about price drops and deals.
In the past year, Hopper has hit 30 million installs, expanded its product offering by rolling out its hotels feature to over 20 markets, and says it is on track to surpass $1 billion in sales.
Travellers have planned over 75 million trips and each day add over 150,000 new trip watches (trip-specific alerts).
As a result, Hopper says 90% of sales come directly from its conversation (push notifications).
The firm said: “This is an opportunity completely unique to mobile and a trend that continues to grow as users delegate their travel shopping to the app.
“Most travel apps are deleted after one month; by contrast, over 50% of Hopper’s sales come from repeat bookers, and users on average engage with the app every 4-5 days while planning a trip.”
Hopper reported “significant” international growth in 2018 and said it plans to accelerate that growth in key markets abroad. A quarter of ticket sales currently originate outside of the US.
The inclusion of 47 low-cost carriers in Europe have led to pronounced growth in the region, with sales up 154% year-on-=year, Hopper said.
Australia, the first market targeted for international launch, has seen sales increase 290%. Hopper will focus on language, currency, and pricing localisation to drive international growth.
Today, 25% of Hopper’s bookings are the result of AI, meaning users are booking trips they didn’t explicitly search for but the app knew to suggest.
Conversion rates on AI-based recommendation notifications are 2.6 times higher than ones for which the users explicitly searched.
The new funding will also help Hopper grow its headcount which it plans to double in the next year.
In the last year, Hopper has grown to nearly 200 employees in Montreal, Cambridge, and various offices around the world.