THE first thing Amadeus Ventures did when the pandemic struck was to support its portfolio companies to “make sure the companies and people were in a safe place”, said Suzanna Chiu, head of the strategic funding programme that invests in early stage travel startups.
“We worked out contingency plans, expecting that there would be tough times ahead,” said the Madrid-based executive. “After we stabilised, we looked at how we could work together – there was definitely a strong sense of working together on how to bring travel back.”
While the situation is better now than it was, travel is still not completely out of the woods, she said. All its portfolio companies have found a home and she mentioned a couple which are actively engaged in projects to facilitate recovery.
For example, Traveler ID for Safe Travel is a proprietary Amadeus technology that integrates with multiple digital health passes, enabling travelers to retrieve digital records through the provider of their choice, without leaving the airline’s website or mobile app. It is part of the Safe Travel Ecosystem, Amadeus’ global programme which is working to help restart travel by bringing together travelers, governments and travel providers to meet challenges posed by COVID-19.
As of September 2021, it has scanned one million health records. Its customers include Lufthansa Group, Air Europe, Norwegian, Frenchbee, Air Caraibes and Air Corsica. Partners integrated include IBM and Centogene, the rare disease company.
With Volantio, the airline startup it invested in back in April 2019, it also had to take a different tack. “Before the pandemic, it was about how to rebalance capacity of flights post-booking – post-booking optimisation by giving offers to customers – but when demand is volatile as it is now, there is a challenge.
“So now it’s more focused on upper funnel traffic and helping airlines track demand on their website. We put that partnership together fairly quickly and sounded out airline customers.”
Since its inception in 2014, Amadeus Ventures has introduced more than 150 startups to its business units and has developed more than 20 joint projects with its portfolio companies. Its portfolio continues to grow by three to five companies every year. Companies already in the investment portfolio include Refundit, Volantio and Dawex.
Through the pandemic it has continued to speak with startups. Said Chiu, “We see some that are very focused on the pandemic, solving immediate pain points such as health passes and contract tracing. We need to see how they grow and how long the need for them will last. In the second category, we see AI data analytics and more seamless payment solutions.”
The second category is of more interest, said Chiu. The use of AI is particularly interesting. “At the beginning of the pandemic there were countless cancellations and changes – that type of scenario, that peak in customer service with a demand not thought of before – that’s a perfect case for AI and automation.”
She sees data analytics as a horizontal play cutting across verticals – airlines, hospitality to DMOs – to “understand how tourism is coming back, where travellers feel comfortable going and booking. Search and intention are critical now.
“We are interested in the end to end journey – how can we join the dots from a traveller’s perspective?”
But one of the biggest customer shifts she’s watching on how it will play out in travel is payments. “Buy Now Pay Later – a few of the big fintech companies are coming into travel and then there’s Pay When You Fly. The trend is about closing the gap between payment and the trip taking place.”
Airports remain an interesting vertical for Amadeus Ventures. “They have always been a stressful place but have become even more stressful. There’s a lot of additional requirements needed now and this space has become extremely interesting to look at,” said Chiu.
In early 2020, Amadeus Ventures announced its expansion to Asia Pacific. Said Chiu, at the time, “Our main aim in expanding Amadeus Ventures across APAC is to encourage and nurture innovation in the travel industry. Startups struggle to gain competitive advantage against large enterprises and if they do, a lot of the time they don’t know how to navigate through the landscape. We not only offer funding but also our industry expertise and network to help young start-ups achieve their strategic and commercial goals.
“It’s a ripe market to be a start-up in, and given the global scope of our business, we are on the search for business ideas and models that can be scaled across borders. We’re looking forward to working closely with all types of startups across APAC and offering them access to our global network of customers and expertise to develop commercial relationships.”
Its criteria for investing has not changed – good market potential, solving a good pain point, excellent team and scalable globally.
“We do not operate a formal accelerator as such because we believe there are many parties out there, such as tech accelerators working across industries, corporate innovation programs and sometimes even general VCs, meeting that need. What we do, other than funding, is play a role in facilitating conversations between startups and Amadeus overall.
“The biggest challenge facing startups is moving from that first customer to 10, then 20. That’s the biggest value proposition any investor can provide, to help companies move beyond early adopters.”
Featured image: Cancun airport, Mexico: “They have always been a stressful place but have become even more stressful,” says Chiu.
