TripActions' recent partnership
with payment and expense provider Divvy brings together a pair of a
high-profile and rapidly growing startups. While both firms remain tight-lipped
about next steps, the plan likely centers on TripActions adding Divvy's payment
and expense management tools to its existing booking platform, according to
observers. Doing so would enable TripActions to offer an end-to-end solution
that would provide greater visibility into travel spending as the company sets
its sights on larger corporate clients.
While TripActions has racked up plenty of attention—and investor
dollars—over the past year-plus, the company didn't previously include a
payment or expense capability. Enter Divvy. The two-year old Utah-based startup
offers physical and digital payment cards that can be pre-approved by managers
for specific uses, such as air travel, hotels or meals.
Divvy also has earned its share of attention from investors,
landing $52 million over three funding rounds and tripling its valuation over
the past year since launching its platform in early 2018. By June, Divvy had
signed up more than 700 companies for its service, which is free for corporate
users, relying instead on interchange fees charged to merchants as a revenue
source.
While TripActions channels and alliances director Todd Maki
declined to discuss specifics of the pact, he said the company sees
"plenty of opportunities for integration and new technological development
to pursue" with Divvy as a partner. "We see Divvy as a significant
player in the expense space that provides a streamlined experience for the
users, so we think there's a bright future in aligning with them to create a
strong customer experience end-to-end," Maki said.
Combining booking and expense management tools has been
viewed as a recipe for success since expense giant Concur acquired
Outtask in 2006. Other expense specialists have since followed suit, including
Certify, which bought NuTravel's online booking tool in 2017. From the other
side, booking servicers like Egencia
have expanded to offer expense management products. Meanwhile, a new breed of
end-to-end platforms such as AmTrav
have been designed and built from the ground up to offer both services.
"This deal likely is a competitive response by
TripActions to the providers offering integrated booking and expense,
especially as [TripActions] looks to grow its offering to larger-volume
customers," noted GoldSpring Consulting partner Will Tate.
After initially targeting small and midsize enterprises,
TripActions has begun expanding to companies that employ between 10,000 and
15,000, with larger enterprises to follow, company CEO Ariel Cohen has said.
The firm this year opened a pair of offices
in Europe—its first outside the U.S.—as part of its effort to build out the
24/7 customer support infrastructure required to serve those larger clients.
On a larger scale, having another one-stop-shop for booking
and expense on the market should spark further competition among such
providers—ultimately benefitting corporate travel programs, Tate noted.
"It's always good to have more competitors in the
marketplace," he said.