Startup Winding Tree launched its initial coin offering Feb. 1 in
an effort to raise $10 million to continue developing a blockchain-based travel
distribution platform that aims to disrupt traditional distribution models. The
company isn't waiting for the funds, however. It expects to launch the minimum
viable option version of its hotel platform solution by midyear and plans to
have an alpha version of the airline solution for testing around the same time,
Winding Tree COO Pedro Anderson told BTN at this week's Hotel Electronic
Distribution Network Association conference.
The ICO, which ends Feb. 15, is trading Lif tokens. For the first week, 1,000 Lif tokens will be worth
one Ethereum token, which was trading at $1,039.86, as of 5:04 p.m. Eastern. For
the second week, one Ethereum token will buy 900 Lif tokens . Winding Tree's ICO reached its soft
cap of 4,350 Ethereum tokens within three hours, raising $4.5 million at that exchange
rate.
Winding Tree will use the funds to build out its blockchain community
over the next four years, according to Anderson. About 100 companies have
already signed up to build applications on Winding Tree, and those companies
will receive guidance and participate in troubleshooting for the platform. Winding
Tree promotes a self-sustaining open-source community akin to Linux, a family of
free, open-source software operating systems that's been around since 1991, where
the "travel innovators are building tools that they're selling on
it and the demand side is In full swing," said Anderson.
Platform &
Partners
Winding Tree's September presale attracted more than 1,000
investors—many from within the travel industry, including Lufthansa—and raised
$1.5 million. That allowed Winding Tree to develop the hotel distribution
platform on top of Ethereum, and a minimum viable product will be ready in the
first half of 2018, Anderson said. A minimum viable product is considered to
have enough features to satisfy early adopters.
"For hotels, we're already in the alpha stage with the code
publicly available on GitHub because it's open source. We have hotels that have
tested the technology," he added. "Nordic Choice Hotels did a test
experiment, and they were happy with it. We have others we're working with to
launch, as well."
Winding Tree has other hotel chain participants, each with 20 to
50 properties. Airline partners include Air New Zealand, Lufthansa and
Lufthansa subsidiaries Austrian Airlines, Brussels Airlines and Swiss
International Airlines. Other partners include Business Insider, Coindesk,
Huffpost, Reuters and The New York Times.
The startup plans to release an alpha version of the airline
solution by midyear. Anderson said airlines are more complex, which is why the
company is collaborating directly with its airline partners to build the
solution. "Airlines are definitely less restricted [than hotels] and they
have more control over their own business … but building out that technology is
more complex than hotels because of dynamic pricing and routes," he said.
BlockchainBenefits forTravel Distribution
Necessity led Winding Tree's founders to seek a better way to
distribute hotel content. "We had worked in the hotel space and had
experienced trying to source inventory from the current intermediaries. They
have so much power right now that they can charge very high fees and don't have
to be competitive technologywise because they have such a strong footing,"
Anderson said.
Because Winding Tree is built on blockchain technology, Winding
Tree's system is immutable, meaning users can trust it because the data cannot
be manipulated. Although Winding Tree created its platform, it's not a
middleman because blockchain is decentralized by design, thereby removing a potential
monopoly from a single player. And while Winding Tree collects a database fee for
maintaining the system, it's a few cents compared to the commission fees hotels
currently pay, said Anderson. He pegged such fees at 25 percent.
He likened blockchain to the Internet:
"Everyone can use it. It just is. It exists. It's a living organism that
everyone can build their sites on. Winding Tree is creating that for B-to-B
travel distribution. … Here's a marketplace where hotels can list their
inventory without fees and without running the risk of [intermediaries] turning
around and [taking advantage] later," Anderson said. "It's completely
monopoly proof."