Mathias Hedlund strikes one as the kind of executive who’d do what it takes to get what he wants done. Since 2014, when he took on the reins of Etraveli Group, he has transformed the company, which had a complex, complicated history, into a major global player, powering meta and flights, and that’s growing 25% a year on all metrics with “high profit margins”.
He’s sold the Sweden-based company twice – in 2015 to a German media company for 235m Euros and in 2017, for 508m Euros to CVC, a private equity firm under whose ownership it remains. He sees this as one of his major accomplishments – selling the company “twice at better multiples than our competitors”.
His second biggest, and most recent, accomplishment is having Booking.com select it as its flight partner to power its foray into flights. Booking.com launched its flight product in October and called the pilot with Etraveli, a “Booking.com branded product”.
It is this deal that shows how pragmatic Hedlund can be. He’s happy to be a background player powering flights for metas and OTAs around the world and he’s as happy to be a “API” partner to a major OTA like Booking.com.
Indeed, it was this opportunistic mindset that was responsible for the successful turnaround of Etraveli from an average online travel player, in 2014, to what it is today, operating the brands, Gotogate, Supersaver, Mytrip, FlightNetwork, Seat24, Flygresor and more.
With extensive experience on boards in industries such as gaming, gifting and translation, Hedlund was COO of Klarna, Sweden’s largest payments company, when he was also on the board of Etraveli.
In 2014, when the private equity firm that owned Etraveli at the time decided the group needed a change in management and direction, Hedlund came in to get the job done. “I saw an opportunity that wasn’t being addressed and felt we could become better, and the talent in the company was not being used in the right way.
“At that time, we had a dual strategy – driving traffic to our own brands – marketing, SEO, SEM– and working with metas. Metas were taking share from the direct traffic and yet the company made more money from direct. It was a struggle and I felt we could not fight the struggle with metas.”
As such, he focused the company to help drive metas, rather than compete with them, and he knew it needed to be flight-focused to become a true global player. “We couldn’t compete in hotels, car rentals, and so we put all our energies into becoming number one in flights.”
Asked if the turnaround was a painful process, he said, “It was surprisingly very positive. The reason for that is, we all worked extremely hard, it was intense and it wouldn’t have gone so well without talent in the company.
“The team also saw the same thing I did, so it wasn’t like I was an alien from some other planet. You have to look at the positions that are available to you and if you know you can’t compete with the Skyscanners or Bookings and you are not going to make the investment in branding, then it’s better to do something else. And we had to make sure we do the difficult work at providing good competitive air content at good price.”
Asked if he felt the strategy was a risk at the time, Hedlund said, “We didn’t have a choice. It was either that or slow death. Like Thomas Cook.”
Clearly, the bet has paid off. “What I learnt from the whole process was that beyond having a vision and strategy, it’s really down to the details. This was super important, to change behavior. Now we have more than 1,000 staff and I am delegating as much as I can.”
He’s also changed his management team several times. “There’s only one person left from the original team,” he pointed out.
Asked if this showed him up as a ruthless executive, he said, “No, I’m not. There are four people who used to be in the management team but now they work one level below and they are still with us. That explains why I am not ruthless. Just because you were good in one part of the company’s development doesn’t mean you will be good in another. Companies can outgrow people’s suitability for their roles and I haven’t hesitated to make changes when I have to.
“People accept the changes if you explain to them why you are doing it, and they go on to make good contributions in an environment they like. A mixture of skills and life’s lessons gives you the right tool box and now we have the perfect match in our company – right strategy, right talent to grow even more.”
In July, it bought air technology specialist TripStack and online travel agency Flight Network to boost its presence in North America as well as extend its airline integration capabilities. At the time, he told Phocuswire, “We’re humble, we’re going to be busy integrating. There’s a lot of strategic change happening in the industry with airlines changing the distribution model and Google Flights taking off and there are signs it’s taking off in Europe now and we want to be a part of that.”
In the interview with WiT, he said, “We are so good at unit economics that when we acquire something, we can apply our playbook to the new assets.”
He’s excited about the partnership with Booking.com because it takes the group into a potential new line of business. At the time of the announcement of the partnership, Hedlund said, “The flights industry is getting increasingly complex and we see an increasing demand from partners that want to get access to the air content, pricing capabilities and tech solutions we can provide.”
Having taken Etraveli in a new direction for the last five years, Hedlund said it was time for a change and the cooperation with Booking.com is an example of that and “us stepping away from only being a classic OTA”.
Just as five years ago it took a step back to be a “meta powerer”, he said, “It’s okay if someone wants to design the front end and are better than us at that, but we can do the air content, pricing, analytics, the deep complex flight stuff. This is also why we acquired TripStack, an LCC aggregator with virtual interlining capabilities.
“It supports this position of stepping back. Skyscanner is to become a marketplace, Booking.com is getting into flights – changes are happening at the front end and we have to adapt to that. Instead of fighting these initiatives, we have to adapt and do what we do best.”
He sees the coming out Google Flights as well as the development of metas on a global scale as a good thing. “We love the metas. Google has changed recently, they’ve become very cooperative. It’s because we are not directly competing and can help them with their vision; if you want competitive flight services, you should want to work with us.”
Asked how he felt about Oliver Dlouhy’s vision of Kiwi.com becoming a global virtual supercarrier, which he shared at Phocuswright conference, Hedlund said, “Oliver has a very big vision and we wish him all the best. We are happy to be only the best in flights.”
As successful as Etraveli has been under his charge, Hedlund said, “There are a lot of things we could do so much better. One part of our success is that we are so far from happy with what we have done, there’s always a relentless urge to do better.”
One area perhaps could be a more diverse management team. While it’s more diverse in nationalities – it’s gone from all-Swedish to two Greeks, one Danish and one Canadian – Hedlund said it was predominantly male although recently complemented with Pia Vemmelund, previously managing director Kayak EMEA and Momondo. “Somehow this industry is very male, even in gaming, we saw more women. There seems to be fewer women in the flight space and that’s unfortunately a reflection of the industry.”
