Travelbeta, the Lagos-based travel-booking startup just closed a $2 million seed fund. The funding will go into negotiating partnerships with travel agencies and other partners across the world that will help it provide more travel options to Nigerians, says the startup’s co-founder and former Konga exec, Onyekah Akumah.
The seed round came from Altheus, a local investment firm and other local investors that chose to remain unnamed in the announcements.
Onyeka Akumah, Wole Ayorinde, and David Asuku, the co-founders started the company in July out of a physical location and took the company online at the end of October. Before Travelbeta, Onyeka Akumah worked at Konga, and also Wakanow, an online travelling booking agency which offers similar service as Travelbeta.
The funding is coming in early. For most Nigerian startups, the typical script is to bootstrap for up to a year with multiple investor pitches and sustained traction, before winning over investors.
Onyeka told TechCabal that the quality of the team was a big draw the for the investors.
“We’ve been able to assemble great talent in the Travel industry across different departments of the organization. The investors were first convinced about the ability and most importantly the experience of the team to deliver on its mandate,” he said.
He also cited the opportunity with the market size. According to him, “the number of travelers in Nigeria grew by over 15% in the last 12 months.” This, coupled with little the number of people that currently get tickets via online portals – Onyekah puts it at around 5% – sealed investors’ confidence in the business.
It appears local investors are getting more interested and confident in the ecosystem. So far in 2015, EchoVC, led by Eghosa Omogui has invested in three local businesses: Hotels.ng, Printivo and Adbox.
Travelbeta is coming to do what Wakanow (the most visible – and likely the most profitable – online travel booking agency in Nigeria) has done in Nigeria for a long time and this appears a full-on competition for Wakanow. Travelbeta, however doesn’t see this as competition with Wakanow but with offline travel agencies.
“If over 20 million Nigerians traveled in the last 12 months and only 3 – 5% traveled using an online travel agency, the market is big enough for a second or third major player,” Onyeka says.
In its five months of operation, Travelbeta has done about $500,000 in revenue with 55% of that from repeat customers, Onyeka says.
Customer acquisition, building out their technology, new hires and opening more offices across Nigeria is also part of the expenses that the funding will attend. Onyeka says the long game is to be the leading Destination Management Company packaging travel bundles for travellers in the region.
“We want Nigerians to start appreciating traveling within their own locality,” Onyeka says. “We would be growing from just an online travel agency focused on flights, hotels and visas with the most affordable fares available to building amazing packages for Africans to experience Africa.”
