It’s good news for the tours and activities as well as APAC travel market as Korea-based MyRealTrip announced a raise of $56.7 million (75.6 billion KRW) in a Series F equity round of funding to accelerate its business and product innovation and ramp up its hiring.
This follows the $210m raise by Klook, Asia’s leading platform for experiences and travel services, in December, which it said would go towards “supporting business growth and fortifying financial stability”.
That this is happening during a harsh capital winter augurs well for the $250b tours and activities sector as well as confidence in continuing recovery of the Asia Pacific travel market. South Korea was Asia Pacific’s second biggest outbound market pre-pandemic and its outbound performance in the past year has been stellar, with Korean travellers fanning out more aggressively and frequently than counterparts in China and Japan.
CEO and founder of MyRealTrip, Donggun Lee, told TechCrunch in this article, “The travel industry was fragmented 12 years ago in South Korea, and there was no platform that provided travel information.”
Lee also said that MyRealTrip had seen its revenue surge by three times since 2022. The outfit posted a gross merchandise volume (GMV) of $746 million (1 trillion KRW) in 2023. It aims to double its GMV and generate an EBITDA of $12 million this year, Lee noted.
Although MyRealTrip has moved on from being a pure tours and activities player, when it was founded 12 years ago, it is still known for its experiences targeted at the Korean traveller and which differentiate it from other OTAs, and with competition ramping up in South Korea, these funds are much needed for it to scale up, something Lee had said was necessary during his appearance at the WiT Seoul conference last November.
At the annual conference, run by WiT and Tidesquare, Lee shared the journey of the company, which has 7.9 million users in South Korea, and its aims to be a super app in the travel industry, offering travel booking services, from flights, accommodations, activities, to local transportation. It has even opened a physical store to capture an older generation of travellers and today, has 300 employees compared to the two it started with.
Its first transformation was in 2017 when recognising the need for increased traffic, Lee ventured into selling flight tickets at competitive prices, expanding the company’s offerings to include flights, accommodations, and more. “There are many ways to get the traffic from other channels like I can spend the money on NAVER, Google, Facebook or Instagram, but I think spending money on the flight is the most efficient way of getting the right traffic,” he said at the conference.
The pandemic gave MyRealTrip another kick to double down and find a path forward – and it found its footing at home. It successfully raised funds during this tumultuous period and pivoted towards domestic travel, finding profitability amid the chaos.
He said, “The one thing about the domestic market is it can boost the frequency. When MyRealTrip was doing outbound business only, customer retention and frequency was a really big problem because travellers go abroad just once a year. But domestic travel, at least four times a year.”
“We want to expand our customer base, because MyRealTrip is doing quite well for free independent travelers aged from 20s to 40s. But travellers over 50s prefer to book group package tours via offline retail stores.
“So it is a totally different concept because we are only strong in the online field. For example, my parents, they never used MyRealTrip for 11 years!”
Donggun Lee speaking at WiT Seoul last November: “The one thing about the domestic market is it can boost the frequency. When MyRealTrip was doing outbound business only, customer retention and frequency was a really big problem because travellers go abroad just once a year. But domestic travel, at least four times a year.”
The company also made several acquisitions and strategic investments. It acquired Startrip in 2022 to capture the number of foreign tourists visiting South Korea post-pandemic. This travel platform lets users discover and book Korean-pop (K-pop) themed spots, including popular boy band BTS music video filming locations. Lee said it plans to operate Startrip as a separate entity to improve its service with advanced technology.
Myrealtrip also invested in IwaTrip, a Korean travel platform that helps users find available spots to travel with kids, and O-Peace, a co-working and co-living space platform designed for digital nomads workers.
July 2023 was another milestone when he said MyRealTrip reached break-even point. “This is the time to prove that we are very profitable. Actually, in July, we were literally at the break-even point line. So, we prove ourselves. If we want to be profitable, we can be profitable.”
It is clearly this confidence of profitability that is behind this latest fund raise co-led by returning investors BlueRun Ventures Korea and IMM Investment. It brings its total raised to approximately $113 million (150 billion KRW) in equity and $39 million in debt since its inception in 2012. New investors Korelya Capital, marking its first investment in South Korea, and Vanderbilt University’s endowment fund and previous backers, including Altos Ventures, Partech Partners, Smilegate and SV Investment, also joined the Series F.
Lee said the company, which uses AI chatbots for customer services, will invest more in technology, including AI capabilities, before its planned initial public offering in 2026.
