The relationship between founder and investor is a critical one. In good times and bad. We share a little bit of background about how these relationships are built.
From the moment I met Fred at Hopper, I had total conviction in him and his vision for the travel industry. His use of data and ability to ideate and build solutions to address the consumer tensions in what felt like a very stale and homogenous industry were indicative of the kind of founders we look for. It actually took me three attempts to invest in Hopper. I first met Fred in the very early years of Hopper when they were raising their seed round. I was also very early into my own career, at a different investment firm that didn’t have the available capital at the time. I met up with Fred again in my next role at another VC firm, but for various reasons still couldn’t make a deal happen. The third time was the charm -- when I came to OMERS Ventures, we finally had what it took to put the right deal together.
I met with OMERS Ventures as they were just starting up in 2012, and it was clear they were willing to take a bet on me. They took the same bet on a few others back then -- companies like Hootsuite and Shopify -- and those bets obviously paid off too. But their first investment in us was made despite an obvious gap between our revenue and valuation at the time. I knew they saw potential, and were committed to growing the company with me. You could say they also took a leap of faith with their second investment. In some ways, it was even more meaningful – by then, they’d seen behind the curtains – so it was a sign of true belief in the business, and provided a signal of trust to the other investors we were able to bring on board.
It is easy to have confidence and trust in the team at Hopper. Something that continues to impress me is how well they use data to evolve their services. They have built an incredibly deep data bank over the last 15 years, and they know what travellers expect and how they behave. They use this same rigour to predict and track business performance with data. Fred is the sort of guy that will be come to a board meeting just as upset when he surpasses targets and doesn’t know why versus not meeting the targets at all.
One of the key benefits of working with OMERS Ventures is the large network they have through their team’s sector experiences, and also through the larger OMERS company. These contacts are helpful when you are trying to grow a business, and I have leveraged these connections in many ways, especially as I was expanding into Europe. But I have also benefitted from these relationships when I’ve landed in hot water and inadvertently blown something up. As a fast-moving venture, of course you make mistakes, even when you have the best intentions. There was a time when we needed to make some serious apologies, and OMERS was able to get us into the right rooms to explain ourselves, say we’re sorry and have an opportunity to mend some relationships that were crucial for business continuity.
When we first made our investment in Hopper, the business model was very different than it is today. And since that time, Hopper has gone on to build out additional services critical to serve the evolving needs of travellers, like insurance and financing options, which have become a driving force for revenue and profit. This constant evolution of the business has led to a number of follow-on raises for Hopper. Fred’s commitment to analyzing data means he is always improving the consumer experience, and driving profits through new and innovative revenue streams. Under Fred’s stewardship, Hopper has grown into a $1 billion business, and has a lot more runway for continued growth -- particularly given that travel is the 3rd largest sector globally after oil and ecommerce. Hopper is part of the evolution of the industry, as consumers demand more control and flexibility, and companies like Hopper that put consumers in the driver’s seat.
We do expect major evolution in this sector over the coming years. We are witnessing how COVID impacted how people are travelling. Consumer need for flexibility and assurance in their travel plans, and having the right products to facilitate this is critical. The other interesting thing is that historically, business travel made up 70% of global travel, and that ratio is most likely forever changed as businesses see the opportunities and cost savings of working remotely. This impacts recreational travel, and technologies like Hopper can play a critical role in supporting both the traveller and travel suppliers on their journey, enabling recreational travel to continue to flourish.