Icelandic travel software developer Kaptio has established a UK office as it targets digitising the 75% of travel revenue that remains offline because tour operator technologies have not kept pace.
The firm raised £2.6 million in a second round of seed funding in February, on top of £900,000 raised in January 2015, the firm opened its UK office in March.
Currently it has one UK customer golfbreaks.com, based in Windsor close to its UK office in Bracknell. It currently employs just two people but expects that to grow significantly.
Arnar Olafsson, chief executive and founder of Kaptio, said the firm had identified a key pain point for tour operators – legacy systems that do not allow them to build travel arrangements on the fly.
He claimed Kaptio’s modern cloud-based technology, designed specifically to work with powerful back office systems provided by Salesforce, cuts out much time-consuming manual effort.
“CPQ (configure, price quote) is a problem everywhere, especially in travel. Seventy five per cent of revenue is offline because it’s so complex. Online process are not fit to manage it.
“Everything is done manually and it can take hours. The technologies we are replacing are old legacy systems. Some have an online or web interface but the foundation is client server.
“Today you have to be born in the cloud to really make it happen. You cannot just add something on”
Olafsson said Kaptio enables firms to put together complex group and multi-destination tailor-made itineraries within minutes.
These can be served to the client in a dynamic and customisable format so that the proposal can be personalised to the individual customer either over the phone or on desktop in real-time.
“We make it easier for client to move information within the supply chain. The cost benefits are huge with a system like this,” he said.
“Salesforce does not have to involved but we can use Salesforce with our system and build out all sorts of processes making everything work together.”
Kaptio has lofty ambitions of growing to become a $100 million company, but Olafsson said he was conscious that it should not grow too fast.
He said his background in the hospitality sector means he will always keep the requirements and service of the firm’s existing customers as the focus.
“We are going to build this up to be a leader in tour operator software. We can basically grow as quickly or as slowly as we want.
“We are seeing tremendous interest, appropriate for the sort of solutions we have. Building a company like this is hard. We have to be careful not to grow too fast.
“Things are changing fast and we realise we have to keep up with that pace of change. In five years’ time our solution will be much more advanced.
“Today we are going live with new versions every three weeks or so, adding new features and bug fixing. We had hoped to do three to four releases per year, as it is we are moving so fast.
“We are very service oriented. We come from hospitality so we understand service. You have to do things properly otherwise you won’t have any customers.
“If you are a tour operator today you really want a complete solution. We are about giving them a solution that works.”
So far Kaptio has generated backing from two venture capitalist backers; Icelandic firm Frumtak Ventures and Capital A Partners, based in South Carolina and Sweden.
Olafsson said it plans to go after a substantial round of series A funding within the next 12 months.