Hong Kong travel startup Klook has just announced a Series A round of US$5 million led by Matrix Partners. China Growth Capital and Francis Leung, Chairman and Managing Partner of CVC Asia Pacific, also participated in the deal.
This round comes in just five months after Klook raised US$1.5 million seed round from Wu Xiaoguang of Tencent. According to Co-founder Eric Gnock Fah, the VP and Managing Director of Agoda Wilfred Fan will come on board as a strategic advisor.
Gnock Fah told e27 that apart from its Hong Kong headquarters, Shenzhen engineering hub and Taiwan office, the cash will be used to scale the startups multi-national team from 40 to 50 by the end of the year and to set up a Singapore office.
First Singapore, then Thailand
“Even though we don’t have a presence in Southeast Asia, those markets have been growing very fast. Singapore will be the regional hub for Southeast Asia which will cover Singapore, Malaysia and Philippines as they are the English-speaking markets,” he said.
According to Gnock Fah, “Right now, Southeast Asia accounts for 40 per cent [of our traffic], then Hong Kong, China and Taiwan accounts for 40 per cent, with the rest from Europe and the US.” Gnock Fah said that the next office that Klook opens will be in Thailand in order to target local outbound travelers.
Klook is a web platform and mobile app that lets wanderlusters in Asia book tours and experiences at often discounted prices. Users have over 1,200 curated activities to choose from in 24 destinations (Klook will add Australia and New Zealand by the end of the year) and experiences range from off-the-beaten-path places to tourist attractions.
According to a release, Klook clocks over half a million users across Asia, has been featured by the App Store 80 times, and pulls in 200,000 unique visitors to its web platform every month.
Although the travel booking space is oversaturated and Gnock Fah mentions BeMyGuest in Singapore and MyRealTrip in Korea as competitors, he confidently notes that Klook has firmed up its position as the number one player in Asia.
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This may have something to do with the fact that it is the only travel booking platform with an app and Gnock Fah reports that the one-year-old startup now gets 60 per cent of its traffic from mobile.
Users expect lots from a mobile experience
Going mobile hasn’t been easy for Klook, as users who book experiences via smartphone expect instant confirmation which is a hurdle for activity booking platforms operating in Asia.
“Mobile comes with a lot of challenges in our industry. If you think about it, hotels and flights you can get real-time availability, and mobile has made a lot of people very impatient. Once I book something, I want it to be confirmed right away, but most tours and activities companies haven’t been able to crack that because the industry is so fragmented,” said Gnock Fah.
Reasons for this fragmentation is that many tour operators are not online and the booking processes are done manually. To tackle this problem, Klook is opening offices in cities in order to secure exclusive partnerships with local operators to speed up booking confirmations.
Gnock Fah used the Peak Tram in Hong Kong as an example: Klook is the only website able to offer a discounted e-ticket as it works with the attraction directly. Cutting out the middleman is how the startup has been able to secure exclusive deals.
Is an exit in the cards?
Since inception, Klook has been hyper-focussed on building the foundation for the business. “In the past 12 months, we haven’t been that aggressive with marketing because we’ve been laying the groundwork: We’ve been adding destinations, building relationships and putting together these investors,” he said and noted that although an exit strategy could be in the cards — scaling the business is more a priority.
“Ultimately, we are looking to build something big. There are investors in the business so they may look towards potential exits. We are open to it, but it’s not something that will happen in the next one to two years,” ended Gnock Fah.